Lawful Authority Defence for Mule Charges

What does lawful authority mean in a mule account case?

In Malaysian criminal law, acting under lawful authority is a recognised defence. If you handled a bank account because your employer, a business arrangement or another lawful source told you to, you may be able to argue you committed no offence.

Chapter IV of the Penal Code sets out general exceptions that apply to all criminal charges, including mule account offences under sections 424A, 424B and 424C ^[f1]. They protect people who acted in good faith on genuine instructions.

How do the Chapter IV general exceptions apply?

Chapter IV lists situations where a person is not criminally liable for what they did. Two sections matter most here.

Section 79 excuses an act by someone who, because of a mistake of fact and in good faith, believed the law allowed it ^[f2]. If you believed you were doing lawful work, and that belief rested on the facts as you understood them, this section may apply.

Section 80 excuses an act done by accident or misfortune while doing something lawful in a lawful way ^[f3]. This covers cases where your lawful work became linked to criminal transactions without your knowledge.

How does the defence work under each 424 section?

It depends on the section you are charged under.

Section 424A covers possessing or controlling someone else’s account, and section 424B covers giving control of your own account to another person without lawful authority or lawful purpose ^[f4]. Lawful authority is raised through the Chapter IV exceptions, to show you had a lawful reason for holding or giving control of the account.

Section 424C covers a transaction without a lawful purpose. Here the defence goes straight to the purpose of each transaction and to what you knew. Acting on genuine business instructions can help show a lawful purpose.

What if you handled the account as an employee?

Some of these cases involve employees who handled accounts as part of their job. You may have processed transactions, run company accounts or moved money because your employer told you to.

The defence is stronger if the job was real and the tasks were normal business practice. A formal contract, regular salary, an office and normal working hours all show the job was genuine.

If your employer turns out to have been running a crime, the question is what you knew and when. If you followed normal procedures and had no reason to suspect anything, the defence is stronger. If there were warning signs and you ignored them, the court may see it differently.

What if you were a freelancer or business partner?

Lawful authority is not limited to employees. Freelancers, contractors and business partners who handled accounts under a business agreement can also raise it.

The key documents are contracts, invoices, payment records and messages with your client or partner. They show the arrangement existed before the suspicious transactions and that your role was set out in advance.

Courts check whether the business relationship was real. A genuine contract with clear terms, a history of lawful transactions and normal business conduct support the defence. An arrangement that appeared only when the suspicious transactions began, or that has no normal business paperwork, is harder to defend.

What evidence supports this defence?

This defence rests on evidence. Start collecting it now, before records become harder to get.

Employment records come first: your contract, offer letter, payslips, Employees Provident Fund (EPF) and Social Security Organisation (SOCSO) records, and any written job description. They prove you were a real employee doing assigned work. Our employment evidence guide lists what to gather.

Business documents come next: contracts with clients, invoices you issued or received, delivery orders and payment receipts. Any paper trail showing the business relationship began before the suspicious transactions matters.

Messages matter just as much. Emails, WhatsApp messages and written instructions from your employer or client telling you to handle the account are direct evidence of lawful authority. Use our WhatsApp evidence guide to save them properly.

How do courts judge this defence?

Courts ask: Was the instruction really lawful? Did you act in good faith? Would a reasonable person in your place have questioned it?

The court looks at the whole picture. That includes the type of business, your role, how long you worked there, the number and pattern of transactions, and whether anything should have made you suspicious.

Courts can look at whether a reasonable person with your knowledge and experience would have done the same. A junior employee following normal procedures is judged differently from a senior manager who should have spotted problems.

Do you have a right to a lawyer?

If you are arrested, Section 28A of the Criminal Procedure Code and Article 5(3) of the Federal Constitution give you the right to consult a lawyer before questioning ^[f5]. If you are only called in as a witness, you can still ask for advice first, but whether a lawyer may be in the room is up to the officer.

A lawyer who handles mule account cases can check whether this defence fits your situation. They can pick out your strongest evidence, prepare your statement and act for you during the investigation.

Get advice early, because how you present your case at the start matters. If you have employment evidence or business records, bring them to your first meeting with the lawyer.

What should you do next?

If you believe you acted under lawful authority, start by gathering evidence. Collect your employment and business records, save your messages and write down what happened, in order, while you still remember it clearly.

Then speak to a lawyer who handles mule account cases. Give them a short description of your situation, the section you are charged under and the evidence you have. That is enough for a first view on whether this defence is open to you.

See our mule account defence guide for an overview of all the defences, or our guide to finding legal help to reach a lawyer.

Sources

1. Penal Code (Act 574), Chapter IV: General Exceptions, Sections 79, 80
2. Penal Code (Act 574), Sections 424A, 424B, 424C
3. Criminal Procedure Code (Act 593), Section 28A
4. Low & Partners, “Keldai Accounts: When Helping a Friend Becomes a Criminal Offence” (2024)
5. Raj, Ong & Yudistra, “Unveiling the Mystery: When Your Bank Account Gets Frozen by the Law” (2024)