Money Mule Charges in Western Australia: When Can You Be Charged for Moving Illicit Funds?

Money makes the world go around! However, your decision to receive money or transfer it elsewhere could constitute a criminal offence, even if you’re not fully in the know about where it has come from. Increasingly, people are recruited to receive money into their personal bank account and transfer it elsewhere, not fully understanding that this could constitute a criminal offence.

The term ‘money mule’ is commonly used by police, banks and fraud investigators to refer to people who move the proceeds of crime and could give rise to serious criminal charges. A central question is whether you can be criminally responsible even if you did not commit the original fraud offence or other offence that generated the money.

The following outlines when receiving, withdrawing, transferring or otherwise dealing with illicit funds may become criminal offending in Western Australia.

Key Takeaways

• A ‘money mule’ is not a specific criminal offence, but generally refers to someone who receives, transfers, withdraws or otherwise moves money or property connected with criminal offending.
• Dealing with proceeds of crime can attract serious charges under Western Australian and Commonwealth law, with some WA offences carrying a maximum penalty of 20 years’ imprisonment.
• What a person knew, believed or suspected about the source or purpose of the money can be central to whether an offence is established.
• A person who has genuinely been deceived into handling illicit funds may have a very different legal position from someone who knowingly participates in suspicious transactions.
• Police may examine bank records, messages, cryptocurrency transactions and other communications when determining what a person knew and why the money was moved.

What Is a Money Mule?

A ‘money mule’ is a colloquial term rather than the name of a specific criminal offence. It generally refers to a person who receives, transfers, withdraws, converts or otherwise moves money or property on behalf of another person where the funds are connected with criminal offending. This can include:

• receiving money into a personal bank account and forwarding it elsewhere;
• withdrawing funds and handing cash to another person;
• transferring funds between accounts;
• moving money through cryptocurrency or other payment services; or
• allowing another person to use your account.

Being described as a ‘money mule’ does not determine the offence ultimately charged. This depends on what occurred, what the person knew or suspected and the role they played in the broader offending.

What Money Mule Charges Can Apply in WA?

Under section 563A of the Criminal Code Act Compilation Act 1913 (WA) (the ‘WA Criminal Code’), it is an offence to directly or indirectly engage in a transaction involving money or other property that is the proceeds of an offence. Further, it is an offence to bring into Western Australia or otherwise receive, possess, conceal, dispose of or otherwise deal with property which constitutes proceeds of crime. This offence carries a maximum penalty of 20 years’ imprisonment.

A separate provision applies to dealing with money in anticipation or preparation for a future offence. Section 563B of the WA Criminal Code states that dealing with money or property that is being used, or is intended to be used, in connection with an offence constitutes an offence. This offence also carries a maximum penalty of 20 years’ imprisonment.

Further, Division 400 of the Criminal Code Act 1995 (Cth) (the Federal Criminal Code) outlines a number of offences relating to ‘money laundering’, including dealing with proceeds of crime or money or property intended to become an instrument of crime. The precise offence and maximum penalty depend on matters including the value of the money or property and the accused person’s state of mind.

Depending on how a person became involved, other offences may also potentially arise, including fraud or participation in the underlying offending. The prosecution case will depend on the particular conduct alleged rather than the label ‘money mule’ itself.

Definitions of proceeds of crime are quite broad. For example, section 563A of the WA Criminal Code defines ‘proceeds of an offence’ as money or other property derived or realised, directly or indirectly, from the commission of an offence. The underlying offence can be an offence against the law of Western Australia, the Commonwealth or another State or Territory.

Proceeds do not stop being criminal proceeds simply because they have been moved through an account or exchanged for something else, including physical property, cryptocurrency or other conversions. Indeed, both State and Federal laws are specifically designed to stop the ‘laundering’ of money by moving it through accounts or exchanging the proceeds for other property.

Do You Have to Know the Money Was Illegally Obtained?

What the accused person knew, believed or suspected about the money is key to successful prosecution for money mule charges. Under section 563A of the WA Criminal Code, it is a defence if the accused proves that they:

• did not know that the money or property was the proceeds of an offence;
• did not believe or suspect that it was the proceeds of an offence; and
• did not have reasonable grounds to believe or suspect that it was the proceeds of an offence.

A similar defence applies under section 563B where the allegation concerns money or property being used, or intended to be used, in connection with an offence.

Under the Federal Criminal Code, the knowledge requirement is somewhat different. Different offences under Division 400 apply according to different fault standards, with some requiring belief that property is proceeds of indictable crime or an intention that it become an instrument of crime, whilst others apply where a person is reckless or negligent as to those circumstances. Section 400.9 of the Code also creates offences involving property where it is reasonable to suspect that it is proceeds of indictable crime.

Accordingly, a person cannot necessarily avoid liability simply by deliberately avoiding asking questions about suspicious transactions. Warning signs may include being recruited through an unsolicited ‘job’ offer to receive third-party payments, being paid a commission merely for transferring money or receiving funds from multiple strangers, being asked to quickly move or convert funds into cryptocurrency or gift cards, or being instructed to conceal or misdescribe a transaction to a bank.

What If You Were Scammed Into Becoming a Money Mule?

Some people become involved in suspicious transactions because they have themselves been deceived. A person may genuinely believe they are receiving payment for legitimate work, processing transactions for a business, helping an online friend or romantic partner, or receiving and forwarding money for another apparently legitimate reason.

In that situation, what the person actually knew, believed or suspected at the relevant time can become central. Nevertheless, a truly ‘innocent agent’ who has been deceived into handling proceeds of crime will not be culpable under common ‘money mule’ charges. The difficulty in practice is that police may examine the surrounding circumstances to determine whether the explanation is consistent with the transaction history and communications.

What Evidence May Police Examine in a Money Mule Investigation?

A money mule investigation will often focus on both the movement of the funds and the communications explaining why those movements occurred. Relevant evidence may include:

• bank statements and transaction records;
• text messages and messaging-app conversations;
• emails and social-media communications;
• cryptocurrency transactions and wallet records;
• instructions received from another person;
• payments or commissions received by the accused; and
• what happened after the money entered the account.

That evidence may be used to examine not merely whether the accused dealt with the money, but what they understood about its source and purpose at the time.

What Should You Do If Police Contact You About Suspicious Transactions?

Proceeds of crime offences are serious and can arise from conduct that initially looks very different from traditional ‘money laundering’. If police contact you about suspicious transactions, obtain legal advice before deciding whether to participate in a formal recorded police interview or provide a detailed account of the transactions.

Simply being the account holder does not tell the whole story. Money mule allegations can turn heavily on what the person knew, believed or suspected and the circumstances in which the transactions occurred.

Author Andrew Williams