Police say email and social media scams are particularly prevalent and people need to be vigilant about anything that seems out of the ordinary when it comes to online investments that appear to be offering a great deal. Photo: 123RF
A 60-year-old Auckland man is the latest person to be charged with money laundering in relation to an online scam that has seen victims lose millions of dollars.
Police said the man was arrested late last week and charged with two counts of money laundering after they executed a search warrant at an address in West Auckland.
He appeared in the Auckland District Court on 8 June and will reappear in due course.
Detective Senior Sergeant Craig Bolton of the Auckland City CIB said it was the third "significant arrest" over money laundering that had been made by the Auckland City Financial Crime Unit in recent weeks.
It came after warnings to the public about an emerging sophisticated scam, which involved victims searching for term deposits online.
Once a victim found a bank they wanted to go with, they were prompted to provide their contact details on a "bank" website, which was in fact a fake website, run by a scammer, Bolton said.
"The 'bank' then calls the victim to open a new term deposit, [and] the victim transfers money into a New Zealand-based account held by a money mule, who then sends the funds offshore."
Police will allege the man arrested last week was a money mule directly linked to two recent cases where two victims lost $950,000 and nearly $1 million respectively in a term deposit-style scam.
More than $600,000 of those funds had since been recovered for one of the victims, Bolton said.
Earlier arrests by the Auckland City Financial Crime Unit include that of a 54-year-old man who is facing multiple accounts of money laundering in relation to an ongoing investigation which was reported to police in February.
He is due to reappear in the Auckland District Court for a case review hearing on 1 August.
A second 54-year-old man is also before the court charged with two counts of money laundering and is due to reappear on 15 June.
One of those charges involved a victim transferring $100,000 into a New Zealand-based account, while the second charge related to a separate victim, police said.
Bolton said detectives from the Auckland-based Financial Investigation Unit travelled to Hamilton to locate the man, who later handed himself in to police.
Warning to those laundering money
Bolton said while the recent arrests were "fantastic results" for the victims involved, people needed to remain vigilant.
"Unfortunately there are still people out there looking to exploit our most vulnerable members of the community."
Scams were always circulating, police said, with email and social media scams particularly prevalent.
They urged anyone who saw something online that they thought might be attractive or a great deal to do their research, speak to friends and family, check with the Financial Market Authority (FMA), and be vigilant about anything that seemed out of the ordinary.
Bolton had a clear message for money mules.
"If you are receiving money into your account from people you have not met and don't know and keeping some of the money for yourself before sending the bulk of the money overseas - you are a money mule and you could be arrested and prosecuted for money laundering," he said.
"If you think you are laundering money, I recommend that you advise your bank immediately and seriously consider self-reporting to the police, rather than the police knocking on your door with a search warrant or to arrest you."
What is a money mule?
- A money mule is someone who transfers illegally acquired money on behalf of someone else
- They help launder the proceeds derived from online scams and fraud by allowing their personal bank account to receive money before the money mule transfers the money to an overseas bank account
- A money mule receives a commission for their part in this crime, which normally involves retaining some of the money in their personal bank account before transferring the bulk amount overseas
- Money mules in New Zealand have been recruited by overseas criminals and scammers
Caution urged when looking into term deposits
Police offered the following advice to those investigating online investments:
- Search for 'broker' companies online before engaging with them
- Do your research - the FMA frequently publishes the names of suspicious companies on its website
- Talk to your bank or other finance professional before making online investments