Section 424C: The Heaviest Mule Penalty

What Is Section 424C?

Section 424C is the most serious of the three mule account offences introduced in 2024. ^[f3] It targets anyone who makes a transaction through a bank account, e-wallet or other payment instrument without a lawful purpose.

It carries the heaviest penalty of the three: a fine of RM10,000 to RM150,000, 3 to 10 years in prison, or both. ^[f1]

What the Prosecution Must Prove

To convict you under Section 424C, the prosecution must prove its case beyond reasonable doubt.

First, that a transaction went through an account or payment instrument. That includes bank transfers, e-wallet payments, card payments or any other movement of money.

Second, that the transaction had no lawful purpose (your own account) or no lawful authority or lawful purpose (someone else’s account).

Third, that you were the one who made it. This sets 424C apart from Section 424A and Section 424B, which are about holding or handing over an account rather than moving money through it.

What “Without a Lawful Purpose” Means

Section 424C has two parts. ^[f4] Under 424C(1), you make a transaction through your own account without a lawful purpose. Under 424C(2), you make a transaction through someone else’s account without lawful authority or a lawful purpose.

Examples that can raise the question include receiving money from online scams, transferring money that came from fraud, and handling payments linked to illegal gambling or drugs. One transaction is enough if it fits the section.

A transaction that looks ordinary can still fall under 424C if there is no lawful purpose behind it.

Why the Penalty Is the Heaviest

Section 424C carries the highest penalties of the three sections. ^[f2] The fine ranges from RM10,000 to RM150,000 and the prison term from 3 to 10 years. The court may impose both.

Section 424A has a lower maximum fine and a shorter maximum prison term. Section 424B has a higher maximum than 424A, but 424C is higher than both.

The higher penalty applies to the act of making the transaction, not to holding or lending an account.

How Section 424C Differs from 424A and 424B

Each section targets a different role in mule account activity, and the difference tells you which may apply to you. Our comparison of all three sections covers this in detail.

Section 424A targets someone who holds or controls another person’s account. Section 424B targets someone who hands over their own account. Section 424C targets someone who makes transactions through an account without a lawful purpose.

In short, 424A and 424B are about who holds the account. Section 424C is about what was done with the money.

How Your Purpose Is Judged

The purpose of each transaction is at the heart of any 424C defence. ^[f5] The court looks at the circumstances, including what you knew, what instructions you received and whether the explanation holds together.

The court may consider:

• how large and how frequent the transactions were
• whether you took instructions from people you did not know
• whether you were paid to let money pass through
• whether anyone explained where the money came from

For more on this, see our guide on what the prosecution must prove about what you knew.

Common Situations That Lead to 424C Charges

A few everyday situations can lead to 424C charges.

A common one is handling transactions for someone you met online who paid you to use your account. Even if you thought the work was genuine, the prosecution will say there was no lawful purpose for moving that money.

Another is receiving large sums from unknown sources and passing them on straight away. The speed and pattern of these transfers can form part of the prosecution’s case.

A third is running money through a business account that does not match the business’s normal activity. Banks watch transaction patterns and report anything unusual under their AMLA reporting duties.

Possible Defences Under Chapter IV of the Penal Code

Depending on your facts, some defences may be open to you. They are in Chapter IV of the Penal Code, which sets out general exceptions to criminal liability.

Section 79 covers mistake of fact. If you genuinely believed the transaction was lawful because of a reasonable mistake about the facts, this defence may apply.

Section 80 covers accidents. If the transaction happened by accident while you were doing lawful business, it may be relevant.

Whether any defence works depends entirely on your facts. A lawyer who handles mule account defence can tell you which defences fit your situation and how to back them with evidence.

What Happens If You Are Charged

If you are charged under Section 424C, you will be brought before a court, and the prosecution decides which court hears the charge. The charge will name the transaction, the date and why it is said to lack a lawful purpose.

You can claim trial or plead guilty. If you claim trial, the prosecution must prove every element beyond reasonable doubt. Our investigation and court process guide explains each step.

Section 424C is a bailable offence, so bail is your right, but the court (or the police) sets the amount and conditions. Your lawyer can argue for bail at the first mention (your first court date).

How a Lawyer Can Help

A lawyer who handles mule account cases can spot which elements the prosecution will struggle to prove. The “lawful purpose” question in 424C gives the defence room to explain why the money moved.

Early advice matters because the evidence you gather now shapes the defence. That includes bank statements, messages and your own written account of what happened. Our evidence preparation guide explains what to collect.

A lawyer can also make representations to the prosecution, apply for bail and represent you at trial.

Sources

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