#CRIME: HOW COVID-19 FORCED CRIMINAL COMMERCE INTO THE DIGITAL BANKING AGE
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#CRIME: HOW COVID-19 FORCED
CRIMINAL COMMERCE INTO THE
DIGITAL BANKING AGE
COVID-19 has had global implications for social life, including criminal behaviour. The
increase in the illicit economy, including drugs and sexual services, has supported an
unprecedented growth in fraud and financial crime. This whitepaper introduces a
study that utilises unique access within the criminal world to offer a qualitative
understanding of the human behaviours, decision making, needs and pressures that
have driven engagement in fraud and financial crime during the COVID-19 Pandemic.
Producing two significant findings, this whitepaper details the motivations for
individuals seeking illicit products and services using social media networks to engage
with criminal elements. Social media has opened the criminal world to clients that
would normally struggle to access illicit products due to lack of knowledge or
connection to the criminal world. This engagement with the digital world has meant
that criminals are increasingly accepting payments via bank transfer. This study
highlights how ‘everyday’ low-level criminal commerce is now entering the legitimate
financial services sector through multiple small denomination bank transfers. The
mixture of social media activity and increased use of bank transfers to facilitate
criminal behaviour has meant that COVID-19 has played a significant role in
pushing criminal commerce into the digital banking age.
WE FIGHT FRAUD WHITEPAPER 2021
Dr Nicola Harding, Lancaster University
Tony Sales, We Fight Fraud
Adam Boome, We Fight Fraud
April 2021 www.wefightfraud.org
Key Findings
1) The COVID-19 pandemic has prompted key social changes that have influenced new trends in
criminal behaviour, with fraud, cybercrime, and drug related offences increasing at far greater rates
than predicted.
2) Central to these new trends has been the growth of the illicit economy. This has prompted changes
in the way that criminals in the areas of illegal drugs, sex, and fraud interact with the legitimate
financial sector.
3) Online spaces, including a variety of specialist and mainstream social networking sites such as
Instagram, TikTok, Facebook and Adultwork, have grown in significance in terms of connecting the
legitimate and illicit economies, with third-party communication apps, such as WhatsApp and
Telegram used to facilitate deals in illicit commerce.
2) The significance of online social networking in order to trade in illicit products has meant that
increasingly criminals prefer to receive direct payments into their bank via bank transfer rather than
cash payments.
3) Alternative digital payment solutions such as Pay Pal are perceived by criminals as potentially riskier
for ‘everyday’ criminal commerce in comparison to bank transfers. This is because alternative
providers hold a lower risk threshold, meaning it is more likely that accounts facilitating criminal
activity will be suspended and funds frozen for breaking the terms and conditions with little recourse.
4) The willingness to risk digital payments for illicit product is prompted by the intensity of the ‘need’,
coupled with the perception of social closeness. Social distancing has increased our need for
alternative human connections, promoting online relationships to fulfil the need for social closeness.
As such social closeness becomes a key consideration within criminal risk calculations.
5) Criminals make assessments of risk based upon myths or widely held beliefs about the law and
security that aren’t necessarily true or are exaggerated.
6) Despite the creation of greater links between the legitimate digital financial economy and the illicit
economy, criminals still employ a variety of techniques to avoid detection. This includes the use of
premium rate numbers to transfer funds, circumventing mainstream financial systems, or the
increased use of money mules or fraudulent accounts to infiltrate legitimate financial systems.
WE FIGHT FRAUD WHITEPAPER 2021
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Contents
Key Findings ....................................................................................................................................... 2
Introduction ....................................................................................................................................... 4
Fraud and Financial Crime in a New Era ............................................................................................. 5
The Study ........................................................................................................................................... 7
COVID-19 Specific Financial Crime ..................................................................................................... 8
#MONEY: “Just for going to the bank...” .......................................................................................... 10
#SEX: “It’s all gone cashless...” ......................................................................................................... 13
#DRUGS: “Drug-dealing now = digital”............................................................................................. 16
Transforming from an analogue to a digital criminal ....................................................................... 20
Social distancing promotes ‘social closeness’ .................................................................................. 23
Understanding criminal commerce .................................................................................................. 25
Conclusion ........................................................................................................................................ 28
Expert Reflections ............................................................................................................................ 29
Andy McDonald, Senior Advisor, We Fight Fraud ........................................................................ 29
Tony Sales, Subject Matter Expert, We Fight Fraud ..................................................................... 30
References........................................................................................................................................ 31
Authors ............................................................................................................................................. 32
Dr Nicola Harding ......................................................................................................................... 32
Tony Sales..................................................................................................................................... 32
Adam Boome ................................................................................................................................ 32
WE FIGHT FRAUD WHITEPAPER 2021
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Introduction
Official crime statistics show that the COVID-19 global pandemic has altered criminal behaviour.
Within England and Wales, drug offences have risen dramatically, alongside certain types of fraud,
whilst unsurprisingly offences such as shoplifting, and burglary have dropped considerably as the
country went into various forms of “lockdown”. Although recent studies have used official statistics
to demonstrate these changes, they fall short of explaining what such changes to criminal behaviour
mean for fraud and financial crime prevention, businesses, and wider society. This whitepaper
presents the results of our most recent investigation into the current criminal landscape, offering a
qualitative examination of criminal activity within the current context of an enduring global pandemic.
Through engaging individuals involved in deviant and criminal commerce this study seeks to explain
their relationships with the financial market and the legitimate businesses that facilitate their
activities. Contrary to other fraud reporting, by taking a holistic approach and utilising unique access,
it allows us to understand how entwined criminal and legal social and financial networks are. This
paper details criminals' use of social media platforms to facilitate deviant and criminal behaviour. It
includes a closer look at the emerging ‘edibles’ sector of the illicit drugs industry (food products which
contain illicit drugs such as Cannabis), the advertisement and provision of sexual services, and detailed
interviews with criminals perpetrating COVID-19 specific frauds, engaging in sex work, money muling,
drug dealing and procurement, and persistent and prolific offenders.
The findings show that increasingly criminals are moving away from an illicit cash-based economy
towards “cashless” payments, predominantly facilitated by bank transfer. This is primarily due to how
criminals and others engaging with the illicit economy have altered the way in which they calculate
risk. With greater considerations given to an individual’s “need” (for drugs, sex, or money etc.) and
perceived “social closeness”, heightened by social distancing practises. Utilising unique access, this
WE FIGHT FRAUD WHITEPAPER 2021
whitepaper brings alive the criminal contexts that pose the most consistent contemporary risks to
legitimate businesses and financial institutions as criminal behaviour adapts, innovates, and evolves
during the current crisis.
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Fraud and Financial Crime in a New Era
On March 11th 2020, the World Health Organization declared the COVID-19 outbreak a global
pandemic, with many countries quickly responding to the declaration with strict social confinement
enforcement (“lockdowns”) as a necessary measure to manage human contact and reduce virus
transmission (Ma & McKinnon, 2020). These social and economic changes prompted by the COVID-19
pandemic mean that as a global society we have moved into a distinctive new era.
The significant social changes brought about by multiple and enduring “lockdowns” in England and
Wales have seen a drop in physically acquisitive crimes such as burglary (theft offences fell by 21%) as
more and more of the population are shielding at home. There have, however, been increases in
serious violence, stalking and harassment (mostly online), most types of fraud (notably a 61% increase
in “remote banking” fraud and a 27% increase in “online shopping and auction” fraud), and drug
related offences (up 16%). Although there have been rises in these areas, there is an overall statistical
crime drop of approximately 5% in England and Wales. However, computer misuse is a crime category
that is excluded from this national statistic, and “hacking – social media and email” saw a 53% increase
and “computer viruses and malware” saw a 40% increase during the pandemic (Stripe, 2021). This
indicates that whilst persistent and prolific low-level offenders have been diverted away from their
usual criminal activities, such as shoplifting, the pandemic has created additional criminal
opportunities for serious organised crime, fostering a boom in the illicit economy.
As the illicit economy grows in a time when the majority of society is socially distancing, long held
assumptions about the cash-based nature of the criminal world need to be challenged. This paper
examines criminals’ relationship with legitimate financial services as they conduct business within a
criminal economy during a pandemic that has pushed nearly all social interaction online. So far, as this
review of the existing literature shows, academic research has yet to focus on how the COVID-19
pandemic has altered criminal interaction with financial services. Rather studies have focused upon
understanding fraud victimisation, time series analysis of police reported data, or theorising new and
emerging types of fraud that have been prompted by the pandemic.
Looking specifically at the UK Buil-Gil et al., (2021) completed a time series analyses from data about
crimes known to police between May 2019 and May 2020 to see the extent to which cybercrime had
been affected by the COVID-19 outbreak. They found that reports of cybercrime have increased during
the COVID-19 outbreak, and these were remarkably larger during the two months with the strictest
lockdown policies and measures. “Empty streets, busy Internet” were pointed to by Kemp et al., (2021)
to explain the impact of the pandemic on crime statistics in England and Wales. They also utilised a
time series analysis of historical data on cybercrime and fraud reported to Action Fraud in the UK to
WE FIGHT FRAUD WHITEPAPER 2021
examine whether any potential increases are beyond normal crime variability. Their results showed
that while both total cybercrime and total fraud did increase beyond predicted levels, the changes in
victimisation were not homogenous across fraud types and victims.
Payne (2020) found that in the US, most types of fraud grew significantly in the first three months of
2020 in comparison to the same time period in 2019. They considered the differences between fraud
experiences based on age, finding that older people lost much more economically to fraud than
younger persons, and far more in 2020 than 2019. In addition, older people reported being targeted
more often for certain types of cybercrime (i.e., tech support scams). Payne (2020) stated that the
coronavirus will potentially have a more significant impact on the financial health of older persons
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than younger persons. This view reflects a singular view of victimisation, ignoring the vulnerability of
younger people for digital economic exploitation through actions such as full account takeover or
money muling.
Ma & McKinnon (2020) analyse how cybercriminals target victims’ psychological vulnerabilities. They
assert that criminals were able to take advantage of COVID-19-related anxiety by manipulating
emotional instabilities to enable cyber fraud. 30% of cyber fraud incidents involve cybercriminals
targeting victims using relief as an emotional appeal, while 22% of cyber fraud events are associated
with fear, and another 22% are associated with hope. Other emotional appeals used in cyber fraud
are enjoyment (15%), threat (6%), and compassion (5%) (Naidoo, 2020). For example, cybercriminals
may spread misinformation about possible cures, treatments or government relief funds in order to
utilise relief or hope; to facilitate fear or threat, cybercriminals may circulate COVID-19-related
pressures, including local outbreaks, or use intimidating virus-related images to make victims feel
vulnerable and concerned. Ma & McKinnon (2020) also identified how criminals may use enjoyment
as an emotional appeal to encourage victims to purchase entertainment services, or to exploit
people’s compassion by soliciting donations to those in need. Their research results show that
criminals tend to rely on positive emotional appeals to achieve monetary gains during this current
pandemic.
Karpoff (2020) is a little more optimistic about the future of financial fraud. Examining it from an
organisational perspective they acknowledge that the COVID-19 pandemic and resulting economic
shutdown has fostered major disruptions in relative demands and organisational capital that also
increase the likelihood of fraud over the next few years. However, they identify through theoretical
analysis that most technological and wealth changes seem likely to increase the use and effectiveness
of reputational capital, third-party enforcement, and ethical motivations as fraud deterrents. As such
they predict an overall decrease in fraud on a long-term basis. It is important to note that this is based
upon a theoretical approach which relies upon increased diligence and financial investment in fraud
prevention by organisations within the financial and retail sector that is not guaranteed.
These emerging pieces of research and theoretical forecasts give us snapshots of what can be learned
about criminal activity during the COVID-19 pandemic from official statistics, police held data, or by
building upon existing fraud theories placed within the current social context. However, there has yet
to be an examination of criminal activity from the perspective of those operating within the criminal
underworld. This whitepaper responds to this gap in knowledge by presenting the results of a unique
qualitative study that captures the changing conditions within the illicit economy directly from those
who are engaged in everyday criminal commerce.
WE FIGHT FRAUD WHITEPAPER 2021
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The Study
As part of a holistic approach to security and crime prevention, We Fight Fraud (WFF) are uniquely
positioned to access intelligence directly from the criminal world. Relying upon crime statistics can
only begin to quantify the size and scope of the problem of fraud and financial crime, they cannot
show how fraud and financial crime is connected to wider criminal behaviour nor understand how
criminals use the financial services sector to facilitate their criminal activities. As such, this report
utilises a qualitative methodology to fill in some of the important gaps in knowledge around fraud and
financial crime.
The research was conducted through peer research, specifically with a researcher who has lived
experience of engaging in commerce within the illicit economy. The peer researcher conducted eight
semi-structured interviews with individuals involved in criminal activities that constitute ‘criminal
commerce’. Informed consent was gained verbally before interviews began, as well as consent for the
use of quotes. All names and identifying features have been changed to ensure participant
confidentiality and anonymity. The research was carried out in line with WFF ethical guidelines (which
are informed by the British Criminology Society statement of ethics) and an ethical checklist and risk
assessment completed. Informed consent was gained from the individuals interviewed, with the
research process overseen by an internal ethical process and officer. The interviews were audio
recorded, transcribed, and analysed by the research team. WFF gave access to interview data by
sharing the transcriptions, secondary analysis was then performed by Dr Nicola Harding, under ethical
approval for secondary data analysis from Lancaster University. The research team and Dr Harding
then co-wrote up the findings.
During his interview one regular drug user documented the entire process of ordering a selection of
edibles via Instagram, sending the interviewer screenshots of all the steps in the ordering and payment
process. He then visually documented its delivery and the product and sent this to the researcher
along with a narration of the process that showed how they paid for them, and the services involved
in the delivery. Screenshots were collected and entered as data and can be seen presented within the
findings of this study.
The interviews identified a key relationship between the COVID-19 pandemic and the rise in the illicit
economy, specifically drug use, sex work and fraud. Our analysis drew upon lived experience,
professional expertise, and academic perspectives to understand the way in which social media has
played an important role in facilitating interactions between criminal and legitimate worlds, linked
predominantly by financial transactions.
WE FIGHT FRAUD WHITEPAPER 2021
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COVID-19 Specific Financial Crime
Utilising their lived experience of engaging in criminal commerce, the researcher approached an active
fraudster to assess his engagement with COVID-19 specific criminal opportunities. The fraudster in
question also acted as a go-between, connecting higher level serious organised criminals to more low-
level and sometimes vulnerable drug users that would willingly offer their addresses or bank account
details in exchange for money, alcohol, or drugs. Fred (51) is a white, Irish, male now living in England.
He is engaged in many kinds of criminal behaviour and openly admits this. When asked about his most
recent criminal behaviour Fred describes how he engaged in some COVID-19 specific frauds.
“Well I had some letters delivered to my house which was for… I think it was the furlough
government grant system and it was a set of codes that I had to give to these guys… to access
the code to their thing they was doing to get their money for the furlough. That’s what it was
really – just a code” Fred, fraudster.
Fred used his address to get multiple Government Gateway codes, essential to open online Her
Majesty Revenue and Customs (HMRC) accounts, so that more organised criminals could conduct
fraudulent applications for COVID-19 commercial loans. This demonstrates how, although Fred is a
fraudster, he is fairly low down in the criminal hierarchy. By looking after many ‘houses of multiple
occupation’ (HMOs) on behalf of absent landlords, Fred has access to multiple addresses. His extensive
localised social networks that more organised but geographically detached criminals are willing to pay
for.
“I know it was something with the government loans, or the government grants for the
furlough. I don’t know fully because I was only just getting a drink for it, do you know what I
mean, but I do know that there was only like £12k and £15k.” Fred, fraudster.
WE FIGHT FRAUD WHITEPAPER 2021
Fred is knowledgeable enough to understand that he is only receiving a small portion of the potential
rewards that the organised fraudsters will earn if the government furlough or bounce back loans are
granted. Estimating it at £12-15k per household, with Fred able to access 2-3 households per address,
he deemed that the organised fraudsters were not compensating him enough for access to his
network.
“I was supposed to get £250, but then when I found out how much these lot are actually
getting, I then said ‘nah, nobody ain’t getting the codes’, and I kept the codes until I asked for
a bit more money, and I ended up getting £1,000. It went from £250 to £1,000. I said it ain’t
going out my house, it ain’t leaving for less than £1,000. Simple.” Fred, fraudster.
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Fred offers a glimpse into the way criminals work together, which is often with difficulty or
obstructions. Whoever has the codes can obtain the furlough or bounce back loan money. It is with
this knowledge and understanding the organised fraudsters need for the codes, Fred pulled a criminal
move to extort a greater amount of money from the organised fraudsters.
“I said to him, ‘Listen, it ain’t leaving my house. I’ll rip it up’. I actually said, ‘I will burn it’.
Yeah? Because I don’t care about the guys. Some little Asian guys. They can’t come and trouble
me, do you know what I mean. They’re little fraudsters, like. It’s a different kind of level, do
you know what I mean. So, me, I wasn’t worried about them in any slight way. If anything, I
thought, like… I knew I was gonna get the £1,000 ‘cause I had the ball in my court; because I
had what they needed, do you know what I mean, so… Probably could’ve got more”. Fred,
fraudster.
Fred talks about the organised fraudsters as outsiders who cannot threaten him, he knows that while
he has the codes they need, they will pay. He is also secure in his position within his own community
and is not scared of the organised criminals. Ultimately this probably caused Fred to lose out financially
in the long run as they did not return to use his other addresses. This may have been because, as he
recognises, they are having to pay him first, before they know that the fraud will work. Alternatively,
it may be because they feel that cannot trust him because he went back on the deal.
“I had access to quite a few addresses, like. Probably in excess of 40 addresses, so of course I
was gonna try and originally get 2/3 per address [£500-700 per address], but then when I’ve
actually held back and said nah, I want £1,000. So, they paid me £1,000 for this one, and then
I didn’t see them after that, so then they probably just didn’t want to pay £1,000 a go. Because
they didn’t. What it was as well, although I was getting paid, yeah, I was actually getting paid
before they got their money. So that’s why I think there was a, you know, a ‘give me the whole
grand on every job’ because if they don’t go through or anything happens, I mean, do you
know what I mean… But that’s not my problem! If I get you the places and the thing comes –
I’ve done my end. I want paying, do you know what I mean? Because if one or two flop and
you get three or four, you’re getting 10k, 12k, that covers that anyway in my head.” Fred,
fraudster.
Fred shows himself as a skilled networker who has established strong links within the local deviant
and criminal community. This is one of his key assets when negotiating higher level deals with more
serious organised criminals. There is a distinct ecology within the underworld, where organised
criminals are reliant upon people like Fred to access community assets, such as addresses or money
mule bank accounts. Fred the Fraudster acts as a lynchpin that interconnects all aspects of the criminal
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underworld, from sex work, to drugs, to fraud. One of the ways he builds trust is by offering dependent
drug users the opportunity to make money through odd jobs that help facilitate fraud – such as
keeping track of the post in a house of multiple occupation and intercepting post such as the
government gateway codes he discussed above. The following interviews are all individuals that
interact with Fred or fraudsters like Fred within their own localised criminal social networks to make
money from the illicit criminal economy.
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#MONEY: “Just for going to the bank...”
Fraudsters like Fred are key social networkers within the criminal underworld. In order to gain access
to the multiple addresses Fred can use for COVID-19 he interacts with people from all walks of life,
finding ways to engineer a social closeness that promotes trust in him or by spotting a need to exploit,
such as drug habits or gambling addictions. George is an example of a habitual drug user who is
approached by a fraudster’s go-between, such as Fred, to be a money mule that facilitates money
laundering through his account.
George (54) is a male, white British, ‘retired’ chef who is claiming unemployment benefits. He states
that he can’t work now due to having impaired mobility, so can’t stand or move around for long
periods. George has addictions to alcohol and cocaine. He states that the government doesn’t give
you enough money to live on, never mind for drugs and alcohol, so for that he has had to “do what he
has to do to survive” - which for him was to turn to crime to subsidise his lifestyle and habits. Since
the beginning of the first lockdown George admits that he has been both a drug and money mule.
Moving cannabis and cocaine around his local area in exchange for drugs and accepting money
transfers into his bank account for cash.
George tells the researcher very openly that he has accepted money from unknown sources into his
bank account. The research enquires about the most recent instance.
“Some guy moved some money from some account into my bank account…. £1,000.” George,
money mule.
When asked how George encountered ‘some guy’, he replied that he met them through a friend of a
friend during lockdown. He asserted that whilst the first lockdown made people stay at home overall,
the only difference in subsequent lockdowns has been the pubs and shops shut. People were still
mixing freely in others’ homes and this is where he was approached: at a gathering at a friend’s house.
WE FIGHT FRAUD WHITEPAPER 2021
“It was like through a friend of a friend. He said, ‘if I would put some money into your account,
not from his account (if you see what I mean) would that be ok?’ I said yes”. George, money
mule.
Whilst in this instance George was approached to become a money mule through a friend of a friend
at a house party, he said that he has made other criminal connections on social media, specifically
Facebook and Instagram. He told the researcher how he will make connections but generally move
the conversation over to WhatsApp.
“WhatsApp is double encrypted so it’s safer...” George, money mule.
10 | P a g e www.wefightfraud.orgWhen the researcher asked George how specifically WhatsApp was safer for conducting criminal
activity, he offered a confused explanation about encryption. This is perhaps due to the confusing
messages that are shared in the media about the ability of police to access WhatsApp messages.
WhatsApp's end-to-end encryption is used when you message another person using WhatsApp
Messenger. But crucially, end-to-end encryption ensures only the message sender and the person who
receives it can read or listen to what is sent, and nobody in between, not even WhatsApp. This is
because with end-to-end encryption, messages are secured with a lock, and only the recipient and the
sender have the special key needed to unlock and read them. Messages are not stored on WhatsApp
servers, only the device that sent the message and the device that receives the message (WhatsApp,
2016).
Police may not be able to access encrypted data, but once it is on the sender or recipient's phone the
messages can be accessed and used as evidence if the police obtain the phone handset itself. End-to-
end encryption also does not protect any messages that are backed up to the cloud. This can give
criminals like George a false sense of security when using third-party messaging apps like WhatsApp.
However, George is correct in thinking that apps like WhatsApp offers a greater level of protection
than Facebook messaging in some respects as Facebook messaging does not currently offer end-to-
end encryption. This informs his decision to move conversations from Facebook to apps like WhatsApp
or Telegram. However, he overestimates the protection that end-to-end encryption gives him when
conducting criminal activity.
Despite the elevated sense of security that ‘double encryption’ gives George when using WhatsApp,
he still uses language and phrases that obscure what it is he is actually doing online.
“You just be careful what you say. [it’s a different language, a different era, how we talk...] It’s
like code isn't it.” George, money mule.
Despite admitting that he deliberately talks in a street language that would obscure his activities if the
authorities were to obtain his messages, George stated at first that he didn't know that his activities
were illegal. Although he went on to clarify that he didn’t really see it as much of a crime, and he
wasn't aware of the penalties involved if caught and prosecuted. However, as the interview proceeded
it became more apparent that George was more knowledgeable about fraud than he first implies.
“I don’t think they could [stop us], I don’t think there is enough security around banks as it is. I
mean people are careless. They throw away letters with their personal details on in the bin.
They don’t do them like they do them in offices, shred them. I know people who go through
people’s bins and get their details, or go to gravestones, pick a name and go and get credit or
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a car on finance that way. There’re ways round everything. No, I don’t think the banks have
enough security.” George, money mule.
The researcher asks George to tell him about the first time he got involved with money muling. George
tells how the initial approach was just a simple case of handing over his bank details to the third-party
‘go between’ who would then pass them onto organised criminals, who would then put some money
into his bank account for him to withdraw.
11 | P a g e www.wefightfraud.org“He said he worked with some people and, if I did, they would put some money in to my
account and I would go withdraw it, then I would get a little drink on top.” George, money
mule.
Drawn by the promise of money “for just going to the bank”, George handed over his bank details,
crucially including his online banking login details, to the fraudsters. Three weeks later, £1,000 was
deposited and he was contacted with a meeting place, a local chicken shop, where they would come
to collect the money after it had been in his account. The handover was over in minutes, making
George £200.
What George wasn't aware until months later was that the fraudsters had used his personal details to
open at least four more accounts in his name. This is a common manoeuvre for fraudsters. To become
a money mule, the fraudster wants complete control of the mule’s bank account, giving them total
access to all the mule’s personal data. They can then use this to open accounts that the fraudster does
not have to pay for, cutting out the £400 fee (£200 to the mule, £200 to the go-between). This £400
investment in a money mule will be worth tens of thousands if the fraudsters can open multiple
accounts using his details.
The interaction between George and the organised fraudsters offers a real-life scenario that reflects
just a handful of these new to digital fraudulent attacks. However, George only knows that there have
been at least four new account openings attempted because his bank contacted him and asked him
to come into the branch to explain. There could easily have been more, potentially successful,
accounts opened in his name elsewhere.
George ultimately refused to attend his local bank branch and claimed over the phone that he was a
victim of fraud. The bank correctly believed that Georges account was compromised thorough a full
account takeover and closed his account with immediate effect. Unphased by this George said that he
opened another a few months later with a different bank easily.
Despite the fact that George lost his bank account during the money muling process because the
fraudsters involved tried to open multiple fraudulent accounts in his name, George told the researcher
how he trusted the go between implicitly. When asked if he would consider money muling again he
said that he would without hesitation. George’s need to buy drugs and alcohol, and the fact that the
friend that brokered the deal between George and the fraudsters meant that the George had a need
and a social closeness to the go-between that facilitated the interaction.
George and Fred have obvious links to the financial sector as they are engaged in direct fraudulent
activity and financial crime. However, there are distinct similarities and intersections between the
WE FIGHT FRAUD WHITEPAPER 2021
fraudster, the drug dealer, the drug user, the money mule and sex work as they all operate as
businesses and each other’s clients within the illicit economy.
12 | P a g e www.wefightfraud.org#SEX: “It’s all gone cashless...”
Vicky (47) is a female, mixed-race, dominatrix and sex worker who works in a dungeon in England,
having worked in the sex industry for over 20 years. During the first lockdown she didn’t work at all
for three months but reopened after the initial lockdown and stayed open. She reports that she is
busier than ever, explaining how she earned over £10k alone during the week between Christmas and
New Year 2020. Vicky doesn’t consider breaking lockdown rules to stay open a criminal offence. Nor
does she consider sex work a criminal activity, but a service.
“The first bout of COVID, everyone got scared. It put an end to the dancing and that because
all the clubs shut. That’s mainly why I went into the domination side. I’ve got a friend who has
a dungeon and so yeah, he said I could work there. The second time it wasn’t too bad.” Vicky,
sex worker.
Working through subsequent lockdowns, ignoring social distancing rules, Vicky remarked that all the
equipment is sanitised fully between clients, but her rationale for staying open was that "she takes
risks anyway in this business". She also shows that she is aware that certain activities around sex work
could land her in trouble with law enforcement. As such, she takes calculated risks when necessary
and employs several techniques to protect herself. One of these measures is how she pays to advertise
sexual services.
“I advertise on a few websites, legal websites. There’s lots of different ways you can pay.
Firstly, I can put up pictures and videos that I sell and then I can transfer that into advertising.
They take bitcoin, credit cards, or you can simply ring them up on the phone. Leave them open,
like a [premium rate] chatline, and then that money gets put on my [Adult work] account.
That’s what I’m doing now.” Vicky, sex worker.
Vicky shows the researcher her phone that is plugged in to her charger on the table, the screen shows
that it has been on a call for over 9 minutes. She explains that using a premium rate number to make
a payment means there is no link on her bank statements to advertising. This is something that
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replicates an entirely cash based exchange with clients, where her illicit activities would have no direct
link with her private bank account.
It is likely that Vicky’s worry about linking herself to the sale of sexual services through advertising is
linked to Section 46(1) of the Criminal Justice and Police Act 2001. This creates a summary-only offence
to place advertisements relating to prostitution. A person commits an offence who: a) Places on, or in
the immediate vicinity of, a public telephone an advertisement relating to prostitution, and b) does so
with the intention that the advertisement should come to the attention of any other person or
persons. Under Section 46(3) any advertisement which a reasonable person would consider to be an
advertisement relating to prostitution shall be presumed to be such an advertisement unless it is
13 | P a g e www.wefightfraud.orgshown not to be. However, this does not relate to advertising in newspapers and has yet to be applied
to online spaces.
Vicky leaves the call open for the duration of the interview. The researcher asked Vicky about how she
presents herself on these websites; is it obvious that she is selling sexual services?
“I run it as a business. I have a whole profile that has my times I’m available, my dos & don'ts,
my pictures and outfits, the equipment I have available. So yeah it is all really run like a
business. I have my own spreadsheets.” Vicky, sex worker.
The perception of her work as a business rather than illicit or illegal activity is perhaps encouraged by
the way in which adultwork.com, one of the sites Vicky uses to advertise, communicates with the
workers using their sites. The site offers a way of verifying VAT status so that escorts are charged or
exempt from VAT.
Vicky feels that advertising the way she does, rather than street sex work, makes her work appear
more professional. Therefore, that is the way she conducts herself within her work - just like a
business. This means that when demand for digital payments increased, she diversified her payment
methods and despite initial reluctance she started taking bank transfer payments during the COVID-
19 pandemic.
“A lot of them want to pay by bank transfer now, a lot more these days than there used to. It
used to all be by cash. But since COVID, I feel like we are slipping into that whole non-cash
existence… it’s all gone cashless” Vicky, sex worker.
The researcher asked her to clarify how she began taking payments into her account. She explained
that clients she hasn’t met before often bring cash for the initial transaction, but that quite often they
decide to stay longer or may ask her to access some cocaine for them to consume during the sexual
contact. Being a drug user herself - mostly speed to help her stay awake all night and work - Vicky is
able to obtain drugs from her supplier. She takes payment from her client for sexual services and the
drugs they consume via bank transfer. She then transfers payment for the drugs from her bank
account to the account details sent to her by the drug dealer.
The researcher asked her to clarify if she uses her own personal account, a business account or
somewhere else. She responded that “It goes directly into my bank account.”. Fred understands why
Vicky may be so unbothered by the proceeds of criminal enterprise going through her bank as he
explains:
“So many people are doing it… ‘Who are you gonna catch? Are you gonna catch me? Are you
WE FIGHT FRAUD WHITEPAPER 2021
gonna catch him? You’re not gonna catch all of us.’ So, people are having the illusion that
they’re not gonna get looked at kind of thing, do you know what I mean, because there
probably is… They’re thinking in their mind ‘well, he’s doing it, I’m doing it, he’s doing it,
everyone’s doing it. What the f**k are they gonna look at me for? They’re only going to look
at me if I get caught; then they might look at me.’ So, people are thinking ‘as long as I don’t
get caught, I’ll be alright”. Fred, fraudster.
When discussing this aspect of the financial transaction, Vicky said:
14 | P a g e www.wefightfraud.org“in my eyes I don’t see that I’m committing any crime. In fact, I see that I’m stopping crimes.
Stopping them going out drugging and raping girls. There is a lot of trafficking going on.” Vicky,
sex worker.
She goes on to make a distinction between what she perceives as criminal and financial crime. Telling
how her experience within the sex industry meant that she could easily identify girls on the websites
she uses to advertise who she believes have been trafficked. She viewed that as the real criminal
behaviour, and that her taking payments for the sale of sexual services was not criminal.
Vicky’s perception of what is criminal and what she views as legitimate informed her risk calculations.
She knew that any official link to the advertisement of sexual services could be used as evidence of
criminal activity. As such, she found ways to circumvent the financial system by using a premium rate
number to pay for advertising. However, clients opting to pay by bank transfer isn't something she
explicitly thinks as contributing to any form of criminal behaviour. As such, for Vicky and other ‘girls’
she works with, the act of selling sexual services has increasingly become a digital financial transaction.
Fred mirrors Vicky’s experiences of the increasing use of bank transfers and online payments.
“Online, it’s online. You know, someone will come and go, ‘so I have to transfer that?’ And
you’re like ‘yeah transfer that’. And it’s like people are kind of blind to really what’s going on,
do you know what I mean, because really all that transferring… You’re leaving a digital trace
with everything you do” Fred, fraudster.
Unlike Vicky, Fred is more aware of the risks involved in using digital payment options. However, he is
still very nonchalant about the chances of getting caught.
“..there’s no reason for no one to go and look at you unless you’re flagging up, and then if you
flag up and they look in your account, and they see in your accounts that you’ve been paid by
f*****g Tom, Dick and Harry all kind of money, and you’re only on £400 f*****g Universal
Credit but you’ve had five or six grand go through your account, then that’s some explaining
you’ve gotta try and do.” Fred, fraudster.
Fred perceives the risk of being considered a benefit cheat by the welfare benefits agency a greater
possibility than detection by the bank or law enforcement under anti-money laundering (AML) or anti-
terrorist financing techniques. Therefore, he advocates that crime be seen more as a job or business,
and views his own criminal behaviour as a job, just as Vicky views her sex work activities.
“I just saw that [committing fraud] as a normal everyday job. Just making some kind of chump
change to live, do you know what I mean? …it’s hard. It’s hard for everybody, of course.
Everyone’s struggling.” Fred, fraudster.
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Vicky the sex worker and Fred the fraudster have similar views on the way in which criminal behaviour
has changed during the pandemic, with both noting how receiving money for deviant or criminal
activity has now gone cashless and online. Whilst sex work is a more niche area of the criminal
underworld that is dominated by women who often operate alone, many sex workers like Vicky have
significant links to organised crime through their relationships with drug dealers; both to obtain drugs
for themselves and to supply clients. Therefore, this paper will now turn its attention to the illicit drug
economy and how this has developed during the COVID-19 pandemic.
15 | P a g e www.wefightfraud.org#DRUGS: “Drug-dealing now = digital”
Over lockdown drug dealers and users have reported a rise in the online sale of drugs though social
media accounts, with official statistics also showing a sharp rise in drug related offences. Fred may be
a fraudster, but he also uses and supplies drugs alongside other deviant and criminal activities.
Reflecting on how the pandemic has influenced the drug market he says:
“The thing about it now is… Even before COVID it was like this but it’s worse now. You can
literally go on Instagram and you can have weed delivered to your front door. Someone will
turn up on a ped. Someone will turn up on a motorbike and deliver that weed to your house.
It’s just unbelievable, you know. In that sense, yeah. The market’s gone more… What do I want
to say? The market’s gone more online. Yeah, the market’s gone more digital, do you know
what I mean. Drug-dealing now = Digital.” Fred, Fraudster
Fred sees that the pandemic has pushed crime online, with the drug market A cannabis edible, also
playing a big part in the new illicit online economy. Simon (26), an IT technician known as a cannabis-
and a regular cannabis user in the UK, documented how he finds, orders, pays infused food or simply
for and has class B ‘edibles’ delivered to his door via Royal Mail. He made us an edible, is a food
aware of accounts on various social media platforms including Facebook, product that contains
Instagram, Snapchat, and TikTok. cannabinoids,
especially
Simon talked about how he did not view himself as a criminal. He felt that tetrahydrocannabinol
cannabis should be legal, pointing to the way in which certain states in America (THC). Cannabis is a
had made it legal so it should be the same here, that edibles are just a part of Class B drug in England
everyday life. This is an observation that Fred also makes, showing the global and Wales.
influence of online drug markets.
“We’re always copying the Americans no matter what we do. No matter what it is, in
WE FIGHT FRAUD WHITEPAPER 2021
anything at all…. I’ve got a few friends that actually make edibles that are doing them right
now, that are making them…. He goes online; he gets all the ingredients, does it all properly,
do you know what I mean. He mixes [cannabis] edibles and sells them.” Fred, fraudster.
Whilst talking to the researcher, Simon says he says he can show him how easy it is to obtain as he is
just about to buy some for the weekend and will show him the process.
“Social media seems to be the place to get them right now, so I’m going to look through some
key hashtags [#] until I find what I’m looking for… I've had a quick look through Instagram.
#edibles, #cannabis, #420. Found this page ‘Mary Jane Edibles’ – so I’m going to check on their
16 | P a g e www.wefightfraud.orgaccount for customer feedback and see if they have other social media accounts.” Simon, drug
user.
Firstly, Simon looks at the social media accounts and tries to ascertain which of the accounts is the
lowest risk and as such, the best to order from. Firstly, he looks at reviews and comments under posts
by others who can show they have purchased from the seller before. In this case he found ‘Mary Jane
Munch Creations’.
“All the reviews are pretty good, taste good, High THC content. So, I'm going to message the
vendor and see if we can talk about getting some goods.” Simon, drug user.
Using the hashtags Simon used and others known to the researcher, we were able to find TikTok and
Instagram offering many different kinds of cannabis edibles, including home baked goods in non-
labelled packages similar to the products Simon ordered.
After examining the reviews quickly, Simon decided to try to get a way to communicate outside of the
original social media app, moving the conversation over to WhatsApp. This is something Fred also
identifies as a new way of digitally marketing drugs through the messaging app WhatsApp.
“...they’ll have 500 people on their WhatsApp group, and they’ll get coke or weed or whatever
and they’ll send a video to all the people. Do you know what I mean – like showing people the
green or showing people the coke and you know saying ‘3 packets, 10 10’, ‘3 for 15’, you know?
‘4 for 10’ and all this sort of stuff or, you know, ‘3.5 8 balls for £30’ and half ounces and all
these different flavours… I mean, the flavours of weed is just… I mean, I’ve been smoking all
my life, really, and I’ve never heard of any of these flavours”. Fred, fraudster.
Our researchers completed an analysis of Instagram accounts and posts The top 10 # used to find UK
that appear to advertise the sale of cannabis edibles in the UK. There cannabis seller accounts
were tens of thousands of posts. Here we offer a roundup of the top 10 (including number of posts on
# that buyers will use when looking to access cannabis via the social each #) on social media
media account Instagram. platform Instagram
The top Instagram accounts appearing to sell cannabis edibles in the UK 420 41.9m
currently are @Wonkaedibles that currently have 2048 followers, Cannabis 25.4m
followed by @Nanniesedibles with 5560 followers, with
Cannabiscommunity 20.4m
@Pennchansedibles holding the most followers at 11,007. These are
relatively low follower counts. However, the nature of the sales means Weedporn 12.9m
that accounts do not have longevity. The account will be used for a THC 12.8m
period of time then shut down and another set up by the same people
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710 11.3m
with a similar name will replace them. This resets the followers but gives
the account holders selling the cannabis edibles a little sense of Medicalcannabis 1.3m
security, as in this case a seller doesn’t want to go viral. They want to Medibles 503k
attract custom but not too much attention that may flag the authorities.
Cbdedibles 288k
Many of the accounts will advertise on Instagram but will quickly try to
Tincture 232k
move any sales conversation on to a third-party messaging app such as
WhatsApp or WeChat. Hoping to communicate directly or get in to one of these groups Simon wastes
no time whilst waiting for a response. He decides to do more risk analysis by checking to see if the
seller has other accounts on other forms of social media.
17 | P a g e www.wefightfraud.org“I found them on Facebook and Instagram and the details match up, now I want a private
number or third- party app to talk to them through.” Simon, drug user.
This is something a customer may do with any small business when ordering through social media.
Seeing that there are multiple pages for this illicit ‘business’ makes Simon feel more confident in his
potential purchase.
“I've now got a WhatsApp number for them, so I’ve asked them to see a menu. I’m hoping she
will send me some screenshots of product. I assume it’s a ‘her’ because it’s a ‘her’ type of
page.” Simon, drug user.
He manages to get a phone number and messages via WhatsApp. In his assessment of risk, he has
determined that he thinks this is a woman’s business. This may have helped him drop his guard further
and trust that if he sends money that he will receive the product.
“They bake to order and have lots on their menu. Their prices are £10-£70, and they do door
to door delivery in the local area, but I will get it delivered through the post. They have their
own little T&Cs. It seems really professional. She’s really forthcoming with her details… this
just looks like any other business.” Simon, drug user.
Still making assessments about the ‘business’ and their legitimacy, Simon determines that he thinks
this account is trustworthy and will deliver safe cannabis edibles. He decides to place an order. Initially
offering to pay through PayPal, but later deciding on bank transfer after he realises that the dealer
wants Simon to send the payment through ‘friends and family’. Paying this way through PayPal
removes fees for the seller, but also any form of consumer protection. In a legitimate transaction it
would not be desirable to send funds to a seller this way, because if items are not delivered or as
described there is no recourse for a refund.
“Payment has been made and I’ve sent them a screenshot showing them the payment has
gone into their bank.” Simon, drug user.
Simon did manage to make payment for £70 worth of cannabis edibles to be delivered to his door
through the post. Less than 36 hours after payment was received by Mary Jane Munch. Simon then
texted images of himself opening the package and what was inside to the researcher. This image
clearly shows that the package was sent to him via royal mail ‘signed for’ delivery. He even said, “I bet
my postman doesn’t realise he’s just dropped off £70 worth of class B’s”.
As new social media-based businesses selling cannabis edibles pop up in the UK, often mirroring legal
accounts based within certain parts of the US where cannabis has been decriminalised or legalised, it
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is likely that the recent growth of the ‘edibles’ market is likely to pose future legal challenges,
particularly as CBD edibles are legal in the UK as long the active ingredient comes from a cannabis
plant that contains less than 0.2% THC, and that no medicinal claims are made on the packaging or
marketing of said products. Therefore, as the illicit edibles market grows alongside a legal market in
CBD edibles the line between criminal and non-criminal commerce is becoming increasingly blurred.
As UK social media accounts selling edibles become more and more popular, as does taking payments
by bank transfer, the risk of detection by law enforcement increases. Therefore, it is likely that drug
dealers will turn to fraudsters such as Fred, to find money mules or fraudulent accounts to receive
payments and protect themselves from detection.
18 | P a g e www.wefightfraud.orgWE FIGHT FRAUD WHITEPAPER 2021
Simons 'edibles' order - delivered within 36 hours.
19 | P a g e www.wefightfraud.orgTransforming from an analogue to a digital criminal
Martin (45), a white, male, persistent and prolific offender, told us that crime has changed
dramatically since the start of the pandemic. Unsurprisingly, theft and burglary has decreased
significantly in England and Wales during 2020. Martin used to steal bikes and sell them to fund his
heroin habit. At his peak he would steal up to five, generally top of the range, bikes a day. This would
include bikes with a high street value of around £5,000, but he would sell them for £200-300, with the
money he received for the stolen bikes feeding his drug addiction.
Martin told the researcher that he no longer uses heroin, and so when opportunities to steal became
fewer and farther between, he began to just stay at home altogether. He told us that many criminals
are doing the same. There are far fewer people shoplifting now due to the higher risk of detection
during COVID-19 lockdowns. But, unlike Martin, those that were dependent upon crime to produce
their income found ways to adapt and innovate their criminal behaviour, often turning to fraud like
Fred and George.
Martin considers himself reformed and no longer criminal because he is desisting from the criminal
activities that he felt defined him as a persistent prolific offender and led to 110 arrests, 65 convictions
and around 50 prison sentences across his criminal career. He recognises he is restless though and
struggling to survive without the financial boost that crime gave him before the pandemic. This
restlessness is something that Fred identifies too when looking for people to engage in fraudulent
activity.
“I think it’s boredom as well, bruv. I really do think it’s boredom. Like, boredom… People are…
People who never would get involved with things before because they had a job, because they
done this, because they kept themselves active as such, now a lot of people are sitting down
and they’ve got nothing to do. They’re bored, they’re in, they’re… You know, there’s only so
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long someone can stay in for with nothing. So then people are getting sort of forced in their
minds to think ‘What can I do? What can I do?’” Fred, fraudster.
Martin occupies himself by still engaging in some criminal behaviour by growing four cannabis plants
“for personal use only”. He says that this was not criminal, as he doesn't supply but just grows them
to save money. He said previously he would have bought the seeds from a fishing tackle shop but now
buys the seeds online from shops that sell them “for souvenir purposes”. For that he uses a credit or
debit card.
Just like Fred and Simon, Martin noted how there are now thousands of different strains and that over
lockdown people have been baking cakes or making it into liquid form to consume while bored at
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