![Ruling [DEU] ¦ German Federal Court Narrows Money Laundering Liability for Account Mules Involved in the Predicate Fraud](/assets/images/posts/pexels-annpeach-12309283_1024.webp)
28 April 2026
Ruling [DEU] ¦ German Federal Court Narrows Money Laundering Liability for Account Mules Involved in the Predicate Fraud
A bank account can support fraud without amounting to money laundering
A recent decision by the German Federal Court of Justice serves as an important clarification in financial crime cases involving so-called ‘account mules’: providing a bank account for criminal proceeds may be punishable, but the correct label is not always money laundering.
The defendant had made his bank account available to unknown offenders. He knew that the account would be used in connection with fraud offences committed against third parties and expected to receive a share of the proceeds. Several victims were deceived into transferring money to his account. In two instances, funds were successfully credited. In another, attempted transfers failed. The money that did arrive was later withdrawn in cash from an ATM.
The Regional Court of Verden had convicted the defendant, among other offences, of money laundering in two cases and attempted money laundering in one case. The Federal Court changed this part of the conviction. It held that the defendant was instead guilty of aiding fraud in three concurrent cases.
The key point was that the defendant’s act consisted of making his account available before or during the fraud scheme. That conduct helped the fraudsters receive the victims’ money. It therefore supported the predicate fraud itself. Once the defendant is treated as a participant in the predicate offence, a money laundering conviction requires an additional statutory condition.
Why the money laundering conviction failed
Under section 261(7) of the German Criminal Code, a person who is punishable for involvement in the predicate offence is punishable for money laundering only if he or she puts the object into circulation and conceals its unlawful origin while doing so.
The Federal Court found that this requirement was not met.
The decision draws a distinction between conduct that introduces criminal assets into the legitimate financial system and conduct that merely shifts the proceeds internally among participants. Transferring tainted book money to another bank account can amount to putting it into circulation, because another financial institution obtains access to the asset. Paying illegally obtained cash into an account may also qualify.
By contrast, a cash withdrawal by members of the criminal group does not necessarily put the proceeds into circulation. In this case, the withdrawal was treated as an internal movement of the criminal proceeds between the participants. The funds did not thereby enter the legal economic cycle in the sense required for self-laundering liability.
That distinction mattered. Because the defendant’s account was used to receive fraud proceeds and the later cash withdrawal was an internal step within the criminal scheme, the conduct supported a conviction for aiding fraud, but not for money laundering.
One act of assistance, three fraud offences
The Federal Court also corrected the way the offences were counted. The defendant’s assistance consisted of one act: making his bank account available. The judgment did not show that he made separate, case-specific contributions to each individual fraud.
As a result, the court treated the conduct as one act of aiding fraud relating to three fraud offences in concurrence under section 52 of the German Criminal Code. The defendant’s confession meant that the change in legal classification did not violate his defence rights. The court held that he could not have defended himself more effectively had the altered legal assessment been raised earlier.
Sentencing errors in attempted aggravated gang theft cases
The decision also affected sentencing beyond the ‘account mule’ conduct.
The defendant had also been convicted in connection with offences involving elderly victims. According to the findings, offenders gained access to victims’ homes under false pretences, intending to distract them and steal cash or valuables. The defendant arranged the transport vehicle and waited nearby to collect the offenders and the proceeds. In two cases, the intended thefts failed because the victims remained alert and the perpetrators abandoned the plan.
The Regional Court had rejected a less serious case under section 244a(2) of the Criminal Code and then mitigated the ordinary sentencing range because the offences were attempts. The Federal Court found this legally flawed.
The proper sequence is important. If a court first rejects a less serious case based on general sentencing factors, it must then include statutory mitigating factors, such as attempt, in the overall assessment before finally deciding whether a less serious case exists. Only if the court still rejects the less serious case after considering those statutory mitigation factors may it use the ordinary sentencing range reduced solely because of the statutory mitigation.
Because the Regional Court did not show that it followed this sequence, the individual sentences for those attempted aggravated gang theft cases were set aside.
A further individual sentence was also overturned because the written reasons did not contain case-specific sentencing considerations for that offence. Since several individual sentences were affected, the total sentence of two years and ten months’ imprisonment also had to be reconsidered.
Confiscation: broader joint and several liability
The Federal Court also amended the confiscation order, but in a way that concerned the structure of liability rather than the total amount alone.
The Regional Court had ordered confiscation of the value of proceeds in the amount of €9,630.52, with joint and several liability only for €5,000. The Federal Court held that joint and several liability had to be extended by a further €4,470.52.
The reason was straightforward. Where several participants obtain direct joint control over the same asset derived from the offence, they are generally liable as joint and several debtors. The defendant, as account holder, initially obtained control over the amounts transferred to his account. The total credited amount was €4,630.52. After the cash withdrawal, all but €160, which remained with the defendant as his reward, was passed on to others behind the scheme. For that further amount, the defendant was therefore also liable jointly and severally.
Practical significance for financial crime cases
The decision is useful for banks, defence lawyers, prosecutors and compliance teams because it clarifies the legal treatment of ‘account mule’ conduct under German criminal law.
The use of a bank account to receive fraud proceeds may be strong evidence of participation in the underlying fraud. But if the account holder is already a participant in that fraud, a separate money laundering conviction requires more than receipt and internal onward movement of the proceeds. The prosecution must show conduct that puts the asset into circulation while concealing its unlawful origin.
For compliance purposes, the case also shows why mule accounts remain high-risk even where the criminal law classification may be contested. The account is still a central tool for moving victim funds. From a criminal liability perspective, however, the distinction between aiding fraud and money laundering can affect the conviction, sentencing range and confiscation analysis.
The Federal Court therefore partially allowed the defendant’s appeal, changed the conviction for the account-related conduct to aiding fraud, set aside several individual sentences and the total sentence, and extended the finding of joint and several liability in the confiscation order. The case was sent back to another chamber of the Regional Court for a new sentencing decision.
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