Mojib Rahman was in shock when his bank phoned to tell him they thought he might be a money mule.
Key points:
- NAB took almost $109,000 from a customer’s account after receiving a scam report
- He took the case to the ombudsman, but lost
- The bank has since acknowledged it “could have done better”
The 71-year-old retired industrial chemist said he had no idea what a money mule was.
“I had to find out on the internet what mule means and why they called me a mule,” he said.
The internet — the FBI’s website, specifically — has an alarming definition for someone who’s just been accused of being one.
It says:
“A money mule is someone who transfers or moves illegally acquired money on behalf of someone else.
“Criminals recruit money mules to help launder proceeds derived from online scams and frauds or crimes like human trafficking and drug trafficking.”
Hundreds of thousands of dollars had recently moved through Mr Rahman’s account, under an arrangement he’d made with an acquaintance from the US.
When Mr Rahman heard from the bank, he was “very nervous”.
“I felt very bad because I never wanted to take any part in a situation like that,” he said.
Hours after calling him, his bank, NAB, blocked and seized almost $69,000 from his account.
Two months later, the bank took $40,000 from his second account.
NAB said it had information showing funds in his accounts belonged to a scam victim.
The bank’s fraud team notes, seen by the ABC, say they told Mr Rahman he had been speaking with a scammer and that they’d need to remove allegedly stolen funds that remained in his account and return them to the victim.
“I didn’t see anything from the legal system to say that they were justified in taking some money from me,” Mr Rahman said.
“There was no evidence given to me. This is where I’m very puzzled.”
“I’m very, very angry about that too.”
‘I still don’t believe I’ve done any crime’
It all started a year earlier, in 2019, when Mr Rahman says he fell victim to an investment scam and lost $225,000.
Unable to get help from his bank, he turned to a US company that claimed to assist victims of scams recover their money.
“I asked them if they can help me … but they said you have to pay quite large sums of money before they start working on it,” he said.
“I didn’t have funds to send to them … then they contacted me and they said, ‘all right, you do not have money to pay at the moment, but maybe you can help me — my uncle in Australia, he is quite elderly, and he’s not tech savvy and he doesn’t know how to invest in bitcoin’.”
Mr Rahman said he never got the arrangement in writing, because it was made over the phone, but at his request the American man sent him a photo of his passport to prove his identity.
That gave him comfort to go ahead, as he already had experience with bitcoin.
He said he agreed to convert the uncle’s money into bitcoin for him, for a 5 per cent commission.
Over a month and a half, the man would send him the details of several bitcoin ‘wallets’ — online programs used to send and receive the cryptocurrency.
Mr Rahman would then receive deposits from an Australian bank account with the description “Send BTC back”. He would then send the bitcoin on to the wallets, and the American would confirm it had been received.
This continued until he’d converted almost $334,000 into bitcoin.
“I did not think I was doing any crime, and I still don’t believe I have done any crime,” Mr Rahman said.
“I cannot say that these funds are criminal funds.”
The ABC has decided not to name the American man for legal reasons, but has seen communications between him and Mr Rahman and attempted to contact him.
‘They made themselves judge and jury’
After NAB removed almost $109,000 from his accounts, Mr Rahman began urgently searching for a way to get it back.
Most of the money taken by the bank had been in his accounts before the bitcoin arrangement.
He believed the bank should have tried to retrieve the scam victim’s funds from Coinspot, a cryptocurrency platform where most of the money had been shifted into bitcoin.
The ABC put a series of questions to Coinspot, but the company did not respond.
NAB’s fraud notes show Coinspot told the bank it was no longer holding “funds from these deposits on our platform”.
Mr Rahman reported the matter to the Australian Cyber Security Centre, and said he later spoke to NSW Police.
NSW Police confirmed a report was made but the case has been closed, as “the alleged offence was outside NSW Police Force’s jurisdiction”.
Mr Rahman also went to the banking ombudsman, the Australian Financial Complaints Authority (AFCA), with the help of a paid advocate.
The pair argued the bank did not give Mr Rahman a right of reply and had “no lawful basis” for seizing the funds.
“They made themselves judge and jury in this case,” Mr Rahman said.
The ombudsman says banks can withdraw funds from customers in situations where:
- it has a customer’s mandate or authority
- it has a legal entitlement or obligation to do so, like a court order
- limited other circumstances, like a mistaken payment, apply
Mr Rahman maintains the withdrawal did not meet any of these criteria because the bank has not proven a legal entitlement to the money.
However, AFCA disagreed and found in the bank’s favour, saying:
“The complainant has not suffered any financial loss because the funds belong to a third party, not the complainant. Overall in its dealings with the complainant the bank has shown good faith and acted reasonably.”
‘We could have done better with our investigation’
The ABC put questions about Mr Rahman’s case to NAB, resulting in an extraordinary about face.
Initially, the bank argued the story was not in the public interest, as AFCA had already ruled in its favour.
But after the ABC asked the bank to justify seizing Mr Rahman’s money, given most of the funds he had received had already been shifted elsewhere, NAB admitted it could have done better with its investigation and apologised.
“This is a complex matter, particularly where fraudulent funds are co-mingled with legitimate funds,” NAB Executive Group Investigations and Fraud Chris Sheehan said in a statement.
“We acknowledge we could have done better with our initial investigation and we apologise to our customer for this.”
The bank said it was “working with the customer to make it right”, which the ABC understands may see some of his funds returned.
Mr Rahman said after a challenging three years, he’s hoping he’ll soon be able to get back on his feet.
“I feel very good about it and they have approached me a few times and we are working on a figure so they can compensate for all the things that have happened,” he said.
Questions raised for ombudsman
Banks are under pressure to do more to help victims of scams claw back their money before it quickly finds its way out of reach.
The Australian Competition and Consumer Commission said money mules were being used in a majority of scam reports received by the regulator.
Detective Sergeant John Cheyne, from Victoria Police’s Cybercrime squad, said he was also seeing money mules in the vast majority of scam cases, with people often being tricked into performing the role.
In some cases, a mule can become an offender themselves if they are reckless or negligent.
“The investigations are often quite complicated and the knowledge of an offender really does become quite important when you’re charging somebody with this at court,” Sergeant Cheyne said.
“So that knowledge — whether it be reckless or negligent in relation to dealing with proceeds of crime — [it] is quite a significant difference in the penalties that can be received.”
NAB said it was “seeing a growing number of scams featuring money mules” and was working hard to tackle an increase in scam reports from its customers.
“We have an important role to play in this. We take our financial crime and legal obligations extremely seriously, working closely with regulators and law enforcement agencies to help detect and prevent financial crime,” NAB’s Chris Sheehan said.
The situation also raises broader questions for the independent ombudsman AFCA and its role adjudicating disputes between the banks and consumers.
AFCA was established by the federal government in 2018 to act as an independent umpire to resolve complaints by consumers and small businesses about financial firms.
The ABC asked AFCA if it was satisfied with its adjudication of Mr Rahman’s case, given the bank’s response to evidence presented on the matter by the ABC.
An AFCA spokesperson said the ombudsman service could not discuss the matter for confidentiality and privacy reasons.
“We can only point you to the determination that you have referred to, which provides reasons for the decision,” the spokesperson said.
But they added “if a complainant disagrees with the [AFCA] determination, they retain the right to pursue their case in other ways, including through the courts”.
Mr Rahman remains disappointed that AFCA didn’t hold the bank to account.
“The bank has accepted that they should not have done what they’ve done,” he said.
“I would say that AFCA did make a mistake and AFCA did ignore all the things we were saying, but they accepted what the bank was saying.”