The B.C. Securities Commission says it has identified 116 potential money mules connected to investment fraud investigations since May 2024. The regulator has delivered warning letters to 40 people as part of a strategy aimed at disrupting fraud networks that use local bank accounts to move victims’ money.

The B.C. Securities Commission has identified more than 100 suspected money mules connected to investment fraud cases, highlighting the growing role local bank accounts can play in moving proceeds from scams.

Since May 2024, the securities regulator has identified 116 potential money mules and delivered warning letters to 40 of them. The letters warn recipients that they have been identified as being involved in activity that could result in charges.

Money mules are people who move money on behalf of someone else. In investment fraud cases, they may receive funds from victims into their bank accounts, withdraw cash, or transfer the money onward to accounts controlled by fraudsters. Some know they are helping move illegal proceeds, while others may claim they were misled or did not understand the nature of the activity.

According to the report, the BCSC has been working with the RCMP on “knock and talk” visits to people suspected of facilitating transfers connected to investment fraud. During one visit in Richmond, B.C., officials spoke with a resident believed to have helped move money from fraud victims to the people behind the scheme.

The man reportedly told investigators that someone he met at a poker game had asked him to receive money in his bank account, withdraw it, and hand it to another person. He said he was paid a few hundred dollars.

The BCSC says the purpose of these visits is not necessarily to arrest the suspected mules immediately. Instead, the regulator is trying to educate people who may not realize they are participating in illegal activity and deter them from continuing. For those who are knowingly involved, the visits may also help establish that they were warned, which could support future enforcement action if they are caught again.

Sammy Wu, manager of investigations at the BCSC, said investigators must be able to show that a person knew they were helping launder proceeds from investment fraud in order to pursue certain legal routes. That can be important both under securities law and the Criminal Code.

The issue emerged as investigators noticed money from investment fraud victims moving through local bank accounts. At first, officials thought the account holders might be primary suspects living in B.C. They later realized many were not the organizers of the scams, but rather intermediaries used to move the money.

Investment fraud is often run by organized groups operating outside Canada. By using local residents as money mules, fraudsters can create a Canadian banking trail that makes schemes appear more legitimate and makes it harder to recover funds once they have been moved.

The report notes that money mules are not limited to securities fraud. Similar tactics are used in other crimes, including extortion, drug trafficking, and other fraud schemes. However, the BCSC’s jurisdiction is limited to cases where the money is connected to investment fraud.

Investigators say suspected mules often provide similar explanations when approached. Some claim they are handling money for a business partner or operating an import-export business. But when asked for details, they may be unable to explain the business clearly.

The BCSC estimates that only a small portion of suspected mules are truly unwitting. Others may suspect something is wrong but choose to ignore it, while some may be active and willing participants.

The regulator’s warning-letter strategy is meant to disrupt that pipeline. If someone has been formally warned that their account is linked to suspicious activity, it becomes harder for them to later claim they did not know they were helping move fraud proceeds.

The case also serves as a warning for the public. Allowing someone else to use a personal or business bank account to receive, withdraw, or transfer money can expose the account holder to serious legal consequences. Even where the payment seems minor, the account may be helping move funds stolen from fraud victims.

The BCSC says it hopes the knock-and-talk approach will reduce the use of local money mules in investment fraud and make it harder for organized fraud networks to move victims’ money through Canadian accounts.

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Originally published on Canadian Fraud News.