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An online company hired my friend as an account assistant. They told him they are a business consulting firm, and that they need an account assistant in every area. His job is the following:

  1. Some companies send money to my friend's account by inter-account e-transfer.

  2. My friend needs to withdraw the money, go to a bitcoin ATM and send the money to our dealers, because they are a wholesale company and their dealers receive the money only in bitcoin.

My friend is thinking about it and wants to do the job. He wants my opinion. That's why I asked the question, because I don't want my friend to face any problems.

Update: My friend already made one transaction. He is afraid. What is his next step?

Rodrigo de Azevedo
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ashif antor
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  • When you say inter-account e-transfer, do you mean Canada's Interac e-Transfer? – Nayuki Aug 05 '18 at 01:59
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    Possible duplicate of Is this money transfer a legal way to get money? – Qsigma Aug 05 '18 at 09:13
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    See also: https://money.stackexchange.com/questions/67941/scam-or-real-a-woman-from-facebook-apparently-needs-my-bank-account-to-send-mon/67981#67981 - the fact that it's using bitcoin versus a bank account makes no difference to the legality of doing this, which I explain in some detail in one of the answers (and it's worth reading the other answers that explain why it's a scam, too). – Jules Aug 08 '18 at 21:50
  • How much money was exchanged during the first transfer? – Freiheit Aug 10 '18 at 12:51
  • By "my friend's account" do you mean the company account he manages for them, or his personal account? If he used his personal account... that won't end well - there is no good reason for a legit company to have him use his personal account (and LOTS of good reasons to not). – J. Chris Compton Aug 10 '18 at 14:46
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    I only know one kind of dealers that only take bitcoin for payment. – Tomáš Zato Dec 19 '18 at 12:46
  • This fraud is still happening in 2021 unfortunately. – javadev Jul 05 '21 at 21:46

7 Answers7

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It's a scam. It's called a money mule. Typically the way this will work is that the scammers will make a fraudulent money transfer into your friend's account. Your friend will convert the funds into Bitcoin and send it off to the scammers. After a few days or weeks, the bank will figure out that the original transfer was fraudulent and come after your friend's bank account to be reimbursed. There's no way to reverse the Bitcoin transfer, so your friend will be held responsible for the missing money.

Freiheit
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Charles E. Grant
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    my friend already do one transaction now what can he do ? He to much afraid about this job .now what he can do for next step? – ashif antor Aug 04 '18 at 18:32
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    If it was me? I'd contact the bank, alert them to the possible fraud, and make arrangements to pay them back. A more cautious person might consult a lawyer before talking to the bank. A lot of this depends on how much money is involved, and local law enforcement. If we're talking about $50 then the bank is probably going to be fine with just getting their money back. If we're talking about $5000 which your friend can't pay back, then the bank may go to the local police. – Charles E. Grant Aug 04 '18 at 18:52
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    @ashifantor Your friend is a money mule. – David Schwartz Aug 05 '18 at 00:37
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    This misses the central point that Brythan's answer covers: this is likely a form of money laundering, and as such, your friend is doing something punishable by prison in many jurisdictions. Also, that might make him subject of blackmail by organized crime. CALL YOUR FRIEND NOW, make him stop reacting! – Marcus Müller Aug 05 '18 at 01:36
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    @MarcusMüller money laundering is a remote possibility but seems dubious to me. Money launderers typically go for higher volume transactions. Laundering $100 or even $1000 at a time involves too much overhead. My bet is that this is a straight forward grift, which is as common as dirt. – Charles E. Grant Aug 05 '18 at 03:42
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    @CharlesE.Grant Don’t neglect the likelihood that the police will treat the friend as a victim rather than a criminal. I can’t help thinking that all this talk of how the friend is a money-laundering scumbag who could go to jail for years and years is just playing into the scammers’ hands by encouraging victims to keep very quiet. – David Richerby Aug 05 '18 at 08:14
  • @MarcusMüller Money laundering is when you take money from outside of banking system (cash, bitcoin, western union) and put them into the system (by depositing on bank account). This is the exact opposite, this money will need laundering after the process described by OP. – Agent_L Aug 06 '18 at 11:41
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    @Agent_L I fully disagree. To cite the US Treasury Department: Money laundering is the process of making illegally-gained proceeds (i.e., "dirty money") appear legal (i.e., "clean"). First, the illegitimate funds are furtively introduced into the legitimate financial system. Then, the money is moved around to create confusion, sometimes by wiring or transferring through numerous accounts. Finally, it is integrated into the financial system through additional transactions until the "dirty money" appears "clean.; – Marcus Müller Aug 06 '18 at 11:46
  • There's nothing in there that limits things to banking. It's just as much money laundering to buy a lot of postal stamps with drug money and return them (preferably somewhere else) for (clean) cash, as it is to shift money within the banking system by confusing transactions with strawmen. – Marcus Müller Aug 06 '18 at 11:50
  • @Agent_L Buying an asset in cash with dirty money is still laundering the money, since the asset is still worth something. Bitcoins have value, even if it's volatile, and can be legally sold to another person. The laundering occurs once the dirty money becomes clean, even if it's now in the hands of whoever sold the bitcoin to the launderer. – IllusiveBrian Aug 06 '18 at 13:50
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    Another possibility is that the money comes from hacked accounts. The scammers might get lots of banking passwords by using phishing sites, or cold calling and pretending to be Microsoft employees checking for viruses. However, they can't just transfer money from the hacked accounts to their own accounts, because it can have a risk of getting caught. This is why they need a naive intermediary, who withdraws the (traceable) money and sends it to the scammer in an untraceable way. It's an old trick, they used Western Union before Bitcoin was invented. – vsz Aug 06 '18 at 14:41
  • @MarcusMüller This may be part of a money laundering scheme, but it is itself not money laundering. If some government agency comes along and says "We think this money is proceeds from illegal conduct; can you present a legitimate source for it?", the response "I got it from my BitCoin account" is hardly going to allay their suspicions. – Acccumulation Aug 06 '18 at 18:58
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    @Acccumulation that doesn't matter. "appear legal", not "avoid being suspicious": Al Capone's ways of washing money can be mostly assumed to have been known to the authorities. Still, can't arrest someone for selling used cars / washing high-quality garments / using bitcoin. It's about untraceability and hence loss of legal accountability. And bitcoin does a pretty decent job at that. – Marcus Müller Aug 06 '18 at 19:01
  • @MarcusMüller The whole point is that you have some plausible claim about the source of the funds. It's possible to make money selling used cars. It's not possible to make money by having a bitcoin wallet. Bitcoin is a store of money, it's not a means of making money (and yes, you can make money speculating on bitcoin, but then you need a source of the funds you used to buy the bitcoin). – Acccumulation Aug 06 '18 at 19:10
  • @Acccumulation let me sell a car and accept bitcoin. Of course, the car was an absolute wreck worth 100$, and I got 100,000$, and those 100,000$ never came from the guy I sold the car too, but that makes me as much a money launderer as the guy sending the bitcoins, or the (potentially fictional) uncle in Guatemala that collects collectible car wrecks and signs indisputably the invoices that say 100k$. – Marcus Müller Aug 06 '18 at 19:12
  • @Acccumulation so, does it really matter whether I get a wire transfer, keep 10%, withdraw the rest in cash, and carry a small suitcase full of bills to my client, or take that small suitcase and convert it to bitcoin and transfer that to my client? I don't think so. – Marcus Müller Aug 06 '18 at 19:15
  • @MarcusMüller Yes, that's my point. Neither are, in themselves, money laundering. – Acccumulation Aug 06 '18 at 19:29
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    @Acccumulation https://www.law.cornell.edu/uscode/text/18/1956 um nope, whoever does transfer of any monetary instrument (cash, account value, stocks, gold, art, ancient coins) with the intent of obfuscating the criminal origin of that value representation does money laundering. Says this random criminal code text of the US that I found on the cornell Uni's law site with the title "18 U.S. Code § 1956 - Laundering of monetary instruments". Hm. Unless you're a lawyer (which I'm not) or some other kind of legal expert (which I'm not), I think actual code overrules your opinion. – Marcus Müller Aug 06 '18 at 19:32
  • Let us continue this discussion in chat. – Acccumulation Aug 06 '18 at 19:37
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    This answer does not describe a money mule, it describes a common scam. Money mules actually do make money... before going to prison for money laundering. – BlueRaja - Danny Pflughoeft Aug 07 '18 at 06:27
  • @MarcusMüller In your own definition, the laundering starts when "First, the illegitimate funds are furtively introduced into the legitimate financial system". In this example, the money were removed from legitimate financial system and the part of introducing them haven't even started. (bitcoin is not a financial system) Q.E.D. – Agent_L Aug 08 '18 at 09:32
  • @IllusiveBrian You are confusing "covering the tracks" with "laundering". The two processes are usually executed in immediate succession, but in this example it's the former process, not the latter. – Agent_L Aug 08 '18 at 09:39
  • @Agent_L - you're interpreting the phrase "financial system" too narrowly. The term isn't defined in the legal code AFAICT but the closely related "financial transaction" is (a reasonable interpretation of "financial system" would be "any system that supports financial transactions"), and this is defined in a way such that bitcoin transactions are pretty clearly included ("a transaction which [...affects commerce...] involving the transfer of title to any real property")... – Jules Aug 09 '18 at 23:08
  • ...It also provides an alternative definition ("a transaction involving the use of a financial institution [...affecting...] interstate or foreign commerce") which also applies (as both the source bank account and the ATM involved will be operated by such financial institutions). At the end of the day, Bitcoin may or may not be considered a true "currency", but it is property that has value and can be legitimately transferred between owners, therefore is part of the legitimate financial system, which exists to allow for such transfers. – Jules Aug 09 '18 at 23:08
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    @Jules A suitcase of cash alone is considered "dirty money" because you have no proof of how you've earned it. Moving the cash around and further obscuring it's origins is not laundering. Laundering is "giving dirty money a legit history". Maybe my "financial system" definition is to narrow, but your "laundering" definition is too broad. I try to interpret "financial system" the way IRS would interpret it when trying to tax your income. Cash or Bitcoin out of nowhere is undocumented source - because you haven't laundered it properly. – Agent_L Aug 10 '18 at 07:44
  • Note: anti-laundering laws often have provisions against obscuring history of an asset, but just because a bill was promoted as "anti-laundering bill" it doesn't make everything in it classify as "laundering". – Agent_L Aug 10 '18 at 07:46
  • @Agent_L - so anyone who did a bit of bitcoin mining 10 years ago when you could easily earn hundreds of bitcoins using commodity hardware and then forgot about them until now is going to have their money confiscated? Bitcoin turning up effectively out of nowhere is a common occurrence, and explaining how it happened without documentation is easy. – Jules Aug 10 '18 at 07:53
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    @Jules Confiscated? No. Taxed as undocumented income? Sure. Explaining how it happened without documentation is easy only if the clerk wants to make it easy. – Agent_L Aug 10 '18 at 14:00
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It’s a money-laundering scam, and your friend is likely to get into serious trouble, and possibly lose a lot of money, if he takes part.

Mike Scott
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    Prison is also not out of the question if OP's friend is deemed a party to a money-laundering scheme. – ApplePie Aug 05 '18 at 02:21
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    @ApplePie I think that's what Mike meant when he wrote "serious trouble". – Marcus Müller Aug 06 '18 at 19:34
  • Can you explain how this is money-laundering? It sounds like he's converting funds that are already in a bank into untraceable bitcoins, exactly the opposite of laundering. – Robert Aug 08 '18 at 06:19
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    @Robert It seems highly likely that the money transferred in is in some way dodgy, whether it’s the proceeds of crime, fraudulently obtained, or whatever. – Mike Scott Aug 08 '18 at 06:22
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    @Robert The laundering surrounds the small part that the OP's friend plays. The untraceable criminal money goes to the friend. The friend turns it into Bitcoin, yes, but that'll end up being exchanged back into real money at some point down the line, money that can be spent on drugs and rocket launchers and whatnot. – Lightness Races in Orbit Aug 08 '18 at 13:02
  • @Robert - one plausible money laundering scheme is: money to be laundered is transferred to an unsuspecting victim, and used to purchase bitcoins, which are transferred anonymously to a holding account, which then injects them into a "coin mixing" scheme before sending them to the intended end recipient of the money. The recipient then sells the bitcoins for cash, claiming that they have legitimately been their property all along (e.g. because they invested a small amount of cash in bitcoin multiple years ago when the value of bitcoins was substantially lower than it is today). The ... – Jules Aug 09 '18 at 23:18
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    ... victim is the only identifiable person to have handled the money (which is presumably directly traceable to some illegal activity), and is therefore held responsible for the laundering. Victim has broken the law (even if he wasn't aware that what he was doing was money laundering, he has engaged in a money transfer scheme for profit, which has regulatory requirements that involve holding identification for the people whose money you are moving, and undertaking courses to help identify money laundering schemes and notifying the government if you suspect any such scheme. – Jules Aug 09 '18 at 23:40
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    Even wose, the money may be stolen. I.e. someone gets hand to a credit card or enough bank account details, makes transfer, victim takes money and buys bitcoin he sends off. Bank reverses transfer done without authoriztation and the FBI wants a talk. Happens all the time. – TomTom Aug 10 '18 at 12:35
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Your friend should go to a lawyer. The lawyer can then make a deal with the government where your friend testifies as to the activities. Your friend may be asked to communicate with his "employer" to get them to do more illegal things. Or required to turn over his email, etc. to the authorities so that they can communicate with the "employer" and get them to give additional information.

If your friend cannot afford a lawyer, then the other alternative is to go to the police directly.

The big thing about this that screams scam is that the money is deposited into your friend's account. A real company would buy bitcoin from its own accounts. Processing through a third party account is either money laundering (your friend could go to jail) or a scam (your friend may lose the money withdrawn to bitcoin). Or both, your friend could be broke and in jail.

There is also a risk that they money is obtained illegally and the deposits into the account can be reversed.

Under no circumstances should your friend continue to participate without informing law enforcement.

Brythan
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    It's going to be hard to get the police interested in investigating this since the criminals likely live in another country from the intended victim and unless he actually lost money, there's been no crime committed yet and no victim. Even with email records, etc it's going to be nearly impossible to track them down. Maybe if he's lucky he can find a computer crime task specialist that's interested, but if the scammers live outside the country, it seems unlikely that they'll spend the effort to pursue the case unless there's a lot of money involved. – Johnny Aug 05 '18 at 06:07
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    @Johnny: It depends on the jurisdiction, but in most places money laundering is a crime regardless of the amount. Also if there is a threshold value and an intention on someone's part to exceed it then this is a crime already in progress. – Paul Johnson Aug 05 '18 at 12:15
  • If the friend cannot afford a lawyer, DO NOT CONTACT THE POLICE. Your friend should tell the "company" that he/she "quits", and forget about the whole ordeal. If a crime has been committed, the police will be looking for someone to punish. – sam Aug 15 '18 at 16:15
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This is definitely a scam

Most electronic fund transfers are reversible, whereas bitcoin transactions are final. Your friend will successfully receive the money and transfer it as bitcoin. When the original transfer is reversed for being fraudulent (or even worse proceeds from an illegal act) the money will be reclaimed from your friend's account. They will be out whatever amount was sent as bitcoin.

Even worse the money from the original transfer could be associated with illegal activity, and your friend is now into money laundering and could end up in jail! This scenario might actually result in friend making money, but the longer they do it the more they will seem to be part of it than a hapless victim.

This is not a job, it is a scam.

le3th4x0rbot
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    Presumably the payments are being made from stolen credit cards. – Valorum Aug 06 '18 at 06:49
  • @Valorum That is certainly a possibility, but my understanding is that there are lots of different scams! – le3th4x0rbot Aug 06 '18 at 07:06
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    Sure, but this seems the most likely. They might also be processing payments from blackmail, illegal drug payments, payments to contract killers, etc. – Valorum Aug 06 '18 at 10:03
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    @Valorum can you actually make bank transactions solely using a credit card? I think it is more likely the perpetrators have access to a few bank accounts they're trying to drain as fast as possible. – fonix232 Aug 07 '18 at 09:14
  • @fonix - In a word, yes. If you hack the right database you can collect card details by the tens of thousands. Many overseas (non-uk) cards can be used to make direct cash transfers. – Valorum Aug 07 '18 at 11:48
  • @Valorum that's weird. Also, usually cards "found" online for sale are not from hacking (all databases handling card information must pass PCI-DSS, which makes them practically impenetrable), but from skimming. – fonix232 Aug 07 '18 at 12:14
  • @fonix232 - in my experience a lot come from keylogging, MITM attacks or dodgy trap emails but overseas cards are the best find because you don't need the CVC number to make a purchase or transfer cash – Valorum Aug 07 '18 at 12:40
  • @Valorum This article descries the victim of a Yahoo Boys, which offers a little perspective into the criminal world powering this type of scam: https://www.wired.com/2015/10/online-dating-made-woman-pawn-global-crime-plot/ – le3th4x0rbot Aug 08 '18 at 08:10
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As other people already replied: it's a scam.

Now you ask: "what can he do?" He needs to alert the authorities, explain that he was unaware of the fraud, and ask the police what he can do to help stop it. The police may be able, with his help, to stop it and arrest the scammers. At a minimum, he can escape legal prosecution against himself.

user
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    His friend should NOT hand himself over to the police for them to rake over the coals without first consulting a lawyer. The police are not ever your friend, ever. They exist to incarcerate people and collect evidence of crimes, nothing more. They MIGHT decide it's not worth their time to put together a dubious case against OP's friend, but they might not. Even if they would eventually fail to demonstrate that OP's friend had intent to commit a crime, the legal process to get there is expensive even for innocent people. – Monica Apologists Get Out Aug 08 '18 at 15:00
  • Downvoted because @user suggests contacting the authorities. That would be a good idea if OP's friend wants to go to prison. – sam Aug 15 '18 at 16:09
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The money is real but the source is not legitimate. Typically those are bank transfers from accounts with stolen credentials. If and when the owners of those accounts notify the police, the money will get returned and your brother's bank will demand covering the debt. There will also be criminal investigations with regard to money laundering against your brother.

It is also likely that the bank will cancel his account since your brother signed an agreement that he will use his account only to conduct business in his behalf rather than that of others (exactly because of money laundering laws) and he clearly has wittingly breached the conditions of his account.

He needs to come clean with both his bank and the police and ask for further instructions. If he is very, very lucky, that first transfer was a test balloon that actually won't blow up since its main purpose was to prime your brother for larger work. Then he might even get off reasonably unscathed if he acts now.

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This is a scam. There is no bitcoin ATM. The company will take your friends money and run.

Dheer
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    I agree that it’s a scam, but there is such a thing as a Bitcoin ATM. For example, I have seen one at Piccadilly Circus Underground station in London. – Mike Scott Aug 04 '18 at 17:09
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    I agree, this is definitely a scam, but there are bitcoin ATM. I walk by one on my way to work every day. – Charles E. Grant Aug 04 '18 at 17:09
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    my friend already do one transaction now what can he do ?he just afraided now – ashif antor Aug 04 '18 at 18:29
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    @ashifantor What exactly did your friend do. Did he get money into his Bank account and he has purchased bitcoins – Dheer Aug 05 '18 at 01:29
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    @Mike, Charles, etc. Bitcoin ATMs are not Automated Teller machines (ATMs) in the normally understood way - they don't allow you to withdraw fiat banknotes from a fiat-denominated personal account at a registered/regulated retail-bank. However the term "Bitcoin ATM" is well understood by anyone familiar with cryptocurrencies. – RedGrittyBrick Aug 05 '18 at 17:10
  • And just more followup on the reality of bitcoin ATM machines from https://www.coinme.com/ - they're a Seattle company, and I've been in their office. They recently had an opening party - https://www.eventbrite.com/e/coinme-hq-opening-party-tickets-46849518170. – James Moore Aug 06 '18 at 18:13
  • @ashifantor he's likely lost all that money that he thought was paid into his account. – Criggie Aug 07 '18 at 06:13