A friend of mine trades Bitcoin and often asks me to pick up money for her, i.e., someone sends money to me (on my name) and I just pick it up and give it to my friend. The amounts are usually around $500.
Is this legal? Can I get into trouble doing this?
I have no idea who the senders are. Thank you.
I think it is likely that your “friend” is doing something illegal, and that she is putting these payments in your name to avoid getting caught. You may be being used as an unwitting money mule.
I recommend steering clear of this. Tell her that you will no longer pick up any of these payments for her, whether or not your name is on them.
Giving your friend the benefit of the doubt, it is simply not a good idea to mix money like this with friends, even if it is legal. But because you don’t know where these payments are coming from or what they are for, you certainly should not allow your name to be used like this.
So just to be clear, she gets so many of these ~$500 transactions she can't even make the time to show up and collect them all? Yet, she still holds down a day job cutting hair? You are on here asking if this is strange because well, it seems very strange.
"Bitcoin" something something is a convenient way to explain away strange income sources. It's mentioned in the media as some mysterious source of wealth for the lucky few, who really understands it?
Does this friend cut the hair of the wealthy, influential or socially mobile at a swanky salon? Does she own her on business, as in the entire business and not just rent a stall? Or does she grind out haircuts in a strip mall?
The thing about unreported/illegal income is you can't just quit your day job. It raises too many questions. Legal income, you can tell people about it, be proud of your business, try to grow it. Use a bank account for it. Regular stuff.
Does your friend seem to mention this fountain of cash to others? Or is it on the down low and all you ever hear about it is when you're asked to do a pickup?
Follow your common sense here. And remember if the IRS ever comes calling, that is your name on there. And that is likely very taxable income for you, unless you have legit records of your friend taking ownership of that income. I'm going to guess that doesn't happen. Protect yourself first, good luck.
is this legal?
No, in most places. You are likely participating in money laundering, fraud, tax evasion, or other sorts of crime. You are acting as a money mule. It is bad enough if you receive no monetary reward but if you take a cut of the proceeds of crime you are more likely to be deemed complicit in those crimes.
Can I get into trouble doing this?
Yes. You can be arrested, prosecuted in a criminal court and get a criminal record that will affect your future life.
When the police arrest you picking up the money, you are going to have to prove that all the money received then and in the past wasn't kept by you and that your friend isn't someone you made up or falsely accused. Your friend may deny any involvement. That money might be associated with the sorts of crime you, your family, employers and real friends would find abhorrent.
I do have no idea who the senders are.
Most likely the victims of fraud or possibly criminals themselves (fraudsters, heroin dealers, sex-traffickers, etc).
Update - I read an interesting article in The Economist today: The head of Europol estimates that about $5,000,000,000 of European proceeds of crime are laundered through cryptocurrencies every year, and climbing. Often in chains of multiple small transactions involving money mules. The bigger international criminal gangs are very much involved in this. Recently a UK citizen in the Netherlands was imprisoned for processing several $m in small transactions in this way for a criminal gang involved in the illegal drugs trade.
You need to get yourself a lawyer now! Your name is on the money transfers. Your face is probably on surveillance cameras picking up the money. Worst of all, it sounds like you did a lot for her, which makes you seem more like a partner than someone doing a favour for a friend. It's possible the police are already investigating, or it could take months or even years for this to come back to haunt you.
A lawyer will advise you what the best course of action is, which could range from "don't worry about it" to going to the police to get ahead of this. You can probably also get an initial consultation with a lawyer for free.
EDIT: If your friend really is trading bitcoin, then it sounds like she is buying on a major exchange and then selling using one of the peer-to-peer bitcoin markets. While not everyone buying bitcoin is a criminal, private peer-to-peer purchases are favoured by criminals as they can exchange cash for bitcoin with little or no paper trail. The major exchanges all have know your customer (KYC) and anti-money laundering (AML) policies. There was recently someone convicted of this, although it seems they knew they were helping to launder money.
One of the (claimed) features of Bitcoin (and other crypto-currencies) is the anonymity (let's call these Cryptocoin). When two identities exchange Cryptocoin, the identities that appear in the universal ledger are public keys (which can be discarded once the funds are transferred from the account). Many people use Cryptocoin for legitimate transactions, however some use the (perceived) anonymity as a way to secretly perform transactions which include an illicit component.
One way the government tracks down and prosecutes criminals is by following the money trail. Well, some people have realized that identity can be derived from Cryptocoin by observing the parties at the edge of the transactions. The way that someone might avoid law enforcement would be to avoid having their IRL (in real life) identity associated with their Cryptocoin digital identity. And that is the role which you may be serving, as the unwitting proxy endpoint for receipt of cash.
Suppose that your friend is not engaged in illicit activity, but merely selling high-value items (crafts, collectibles, information). Or even just taking advantage of arbitrage opportunities in crypto-currencies or selling previously obtained (purchased, earned) Cryptocoin. However, the IRS considers any gain in value as income, and unreported income is tax fraud.
Suppose the FBI, DEA, or IRS contact you and start asking you questions. You may well tell them you were just collecting money for your friend. And what proof do you have when she disavows any involvement?
Does this friend also have you shipping parcels for her as well?
Stop, get educated, and Get a Lawyer.
There are different possible scenerio's, but almost all of them end up badly.
I don't know about you, but even that third scenerio you are still being used, and that is the best case scenerio.
In other words, you risk a lot and benefit little. So stop...
EDIT: Also, assuming she is using u as a money mule, you are screwed. People think bitcoins are anonymous, wrong. The blockchain is the most open and transparent payment system ever created. Unless she took some precautions, it can even be tracked by amateurs.
You haven't specified your coutry, so those laws might not apply, but there's something that is called invalid deposit. Your friend is sending you money, but there's no causa for that. For example in Poland such money transfers are taxed with civil operations tax - 2%. I'd expect similar regulations in other EU countries.
So the illegal part is likely you don't report those operations and don't pay taxes that apply.
In that case, it doesn't matter how near friends you are. Even if your grandma have lost her bank card and send money to you account to take them using your bank card, it still constitutes an invalid deposit.
There are only a few outcomes from this situation if you continue.
1) Authorities find out there is illegal activity going on due to your friend.
Thus making your crime a FEDERAL crime. This would leave you in a very bad
place.
2) Tax Evasion or Scamming is what your friend is doing by using you.
This will also end you up in Prison.
3) The actions seems precise enough to elicit other types of activity that may
not be deemed legal.
One other unpleasant possibility is that the "friend" is working a con, eventually the victim will ask how he/she can also invest into "bitcoin" or whatever to make so much money. Less likely than money laundering in this case, but a real possibility under slightly different circumstances.
A lot of people keep suggesting to go retain a lawyer immediately. There is something here that everyone seems to be overlooking though, this friend of his, if she is a criminal ABSOLUTELY KNOWS that he is going to tell the authorities about her when he gets caught, so the fact that she is still even around would indicate that the jig isn't even close to being up yet. The fact of the matter is that fraud and other crimes that would be the most likely underlying funding for this are crimes that are slow to be investigated heavily for quite a while. Usaully someone disputes charges, if they haven't done so before the bank writes it off, if they have the bank will deny it as to the financial institutions repeatedly being a "victim" means you really are the culprit. My personal opinion (In a past life I was involved in this kid of stuff) is that more then likely she does small scale fraud and funnels the proceeds to bitcoin because it is a very slick way to move money, especially now that you have services like the cash app with square which make it very easy to funnel money from bank account through debit or direct deposit info, you have the apps which simply let you take pictures of checks to cash them, no more needing MICR printers for fraudsters this is single handedly bringing back the check game, all these various online companies like paypal and netspend all trying desperately to be real banks and falling over each other trying to make themselves as accessible as possible. And at the end of it all you have social media to learn about people and get as many of the financial backing questions as you can and then you get three chances (three free credit reports) to get the tricky ones in a multiple choice timed environment that you couldn't glean from cyber stalking them and lurking their social media. But it pays off, for instance if you can get one of their credit reports and they have good credit you can immediately get a line of credit over a thousand dollars completely over the internet through paypal right now and funnel that through bogus merchant accounts... you guessed it right into bitcoin through an exchange if you keep good enough records to look legit, or if you don't bother because you are too busy cyber stalking and chatting with potential victims while cutting their hair you use local bitcoins or atms and such. In the criminal world computer crimes and a lot of other cottage industry or white collar crimes are more "women's" crimes while the men like to feel macho and go do dumbass gangster stuff with guns and such. It's really a very silly culture but a chick is exactly who you would expect to be a fraudster, they are great at social engineering, it's a manipulative and passive agressive crime. I'm not saying that men don't do it too, I'm just saying when a woman wants to make money illegally and they don't want to do sex work, this is usaully what they end up doing, there are a lost of stigmas and obstacles for a woman to overcome to be a stickup artist or even a drug dealer (individuals think they can con women easier and they seem much easier targets for robbery. Even if they are tough as ails and not easy targets they will deal with significantly more ATTEMPTS which are always at least minor setbacks in some way shape or form)
But that brings me to the other crime I would suspect she is involved in which is sex work. She could moonlight doing online shows or even escorting at night, sex work, especially live media streams has increasingly turned towards bitcoin based payment options. The ways that the money is coming would seem to indicate this is a possibility. Unlike fraud, these individuals are willingly paying for a service and will be much more eager and less suspicious to send bitcoin based payments themselves to whomever, even some dude who like free haircuts. If fraud is what she is doing she likely has complete control over the funds long before they become bitcoins.
Those are just my speculations from personal experience, in any case she is up to something dude, she would have been more transparent otherwise. She is probably shocked you haven't asked any questions about this. Like I said she is going to have some degree of an idea, even just down to intuition when it is about to collapse and she will be gone when that happens. I would not panick and go straight for hiring a lawyer, yes you are on surveillence footage but it is not kept for very long so unless the police are following you around and obtaining the footage on the fly. Stop doing this activity, if the police are already investigating and have enough evidence for a conviction you will know VERY quickly after your behavior changes (you stop doing the mule runs). If this happens TELL THEM ABSOLUTELY NOTHING, even stuff you think is showing your are innocent can still nail you for some kind of violation you don't think exists or shouldn't exist but does and they will use it against you. They aren't lying when they say that anything you say will be used against you. At this point there is no talking yourself out of it, suck it up keep your mouth shut, chances are they jumped the gun and you will be ORed on your initial appearence anyways because they were depending on you to say something to give them that little bit of evidence they needed for the charges to stick at initial appearance. But absolutely don't tell them anything and at this point think about the lawyer. Odds are the only one who doesn't know you are a patsy is you and unless the jaws are about to be closed on this, you will be allowed to walk away if you do it now.
So tl;dr is just stop it, right now, find a new barber and pay for haircuts. Don't go crazy and overreact and confront this girl, don't go shopping for a lawyer (if she is a serious criminal this will make her very very nervous, and it will likely cost you a LOT of money you don't need to spend since I personally don't think you are in it deep enough to need one yet) Just walk away from it all, and check your credit reports in a couple months because if she's a fraudster I guarantee she knows everything about you to take you for all your money and put you deeply in debt at this point. And the second you are no longer her mule you are of no use to her otherwise.
One thing I forgot to talk about is the micro payment structure. This is specifically done to expedite the transaction. Over certain thresholds the transaction has to be halted and reported to the federal government to see if they think this is money laundering or terrorist funding, them giving the nod that no you aren't collecting money for terrorism take a day or two, but single transactions under the threshold don't trigger this. Obviously it is cumbersome to try and send like 80 thousand dollars in 499 dollar increments but if you are sending an amount that barely crosses that threshold like 5 thousand, it is very much preferable to send it as micropayments, the bank will probably even suggest it as it doesn't get tied up for a couple days in bureaucracy. So the micro payments don't automatically set off a red flag, this is a common legal loophole to make a transaction in the low thousands happen much much faster, no one wants that transaction to sit there an extra two days, the feds don't really want to investigate some white person sending some other white person 6 thousand dollars, but it is the law if it is sent as a single payment and the bank will have to comply. That being said the individuals who usually learn this trick first and almost universally know it are individuals who have been in the criminal justice system. You learn very fast to make your money order court payments in micro payment increments and put money on a friend of family member's inmate account as such as well when they are locked up (a single payment over the threshold to an inmate will generally be more on the timescale of a week or two to clear).
But the flip side of this is that more then likely it wasn't really reported to the IRS, unless he accumulated a massive amount in a short period all through the same method of transfer. More then likely these were small enough and spread out enough that it wont get reported in a way that will be glaringly obvious to the FBI, a good way to check is to try and apply for government benefits and see if these income sources pop up there, yeah you will get denied but applying for government benefits is free and they source the same reporting generally that the IRS does, in fact they source exactly the same reporting that the state tax audits will refer to. My guess is you are filing singe with a modest income shown on w-2s and that's about the extent of your income tax filing for the most part, if I'm right your audit risk is hella low and you really shouldn't sweat the tax implications of these micropayments, there will be no evidence that you ever deposited even a red cent of this money into any kind of account you have or converted it into any reportable purchase like a car or medical bills or real estate, they have no way of proving you wrong when you act shocked and say you had no idea this happened and your identity must have been stolen, thank you so much for letting you know. This is an outrage if you ever find out who did this, blah blah blah.. You didn't keep any of that money, don't freaking pay the tax on it. If she is laundering properly she is paying tax on that same money anyways to get it into her legit accounts (wow 500 dollars of tips again! yeah she is supposed to pay tax on that)
They don't sound like a very good friend. Keep the five hundred dollars a few times and tell your friend it didn't turn up. It's totally illegal and if you're going to get into trouble, you're already implicated so you might as well make some cash from it. I'm sure they'll soon stop asking you.
Unless of course, you're worried about having a horse's head in your bed.
Why dont you just ask? She may be doing something illegal but probably not, possibly just not wanting to have income show up from these transactions as actual income. I have picked up thousands and thousands of dollars in Western Unions and its kinda weird...never seems to end up being recorded anywhere with the Feds. It took til 100, 000 plus of money being picked up before anyone batted an eye. Kind of a grey area. A 500 dollar transaction does not trigger any sort of flag. Then they just asked for copies of license and stuff... dont worry about the occasional 500. I wouldn't...People worry too much. You should ask her for a few bucks here and there, I would do that...
