Money Mule and Enhanced Due Diligence Case Studies on Money Mule Activities and Banking Due Diligence Frameworks

Abstract The rapid expansion of digital banking, online payments, and electronic financial services has significantly improved convenience for customers and financial institutions. However, the same technological advancements have also created opportunities for cyber-enabled financial crimes. One of the most concerning issues in the banking sector today is the misuse of bank accounts through money mule activities. Money mules are individuals who transfer or receive illegally obtained funds on behalf of criminals, often without fully understanding the legal consequences of their actions. This paper explores the concept of money mule accounts, the role they play in cyber-enabled fraud, and the importance of Enhanced Due Diligence (EDD) in preventing such activities within financial institutions. The study also discusses the identification framework used by banks to detect suspicious activities, along with alert systems and customer complaint mechanisms that help in early fraud detection. Through selected case study observations and conceptual analysis, the paper highlights the need for stronger monitoring practices and awareness initiatives to reduce the misuse of mule accounts in the financial system.