Smurfing
Smurfing and structuring are the terms often encountered in the context of money laundering. These are banking terms used to name the breaking of one big financial transaction into many smaller ones in order to avoid being reported to the government.
Smurfing is done to avoid the suspicions from regulators or law enforcement. Laws usually require filing reports of transactions above some particular limit. In the United States, for example, the Bank Secrecy Act requires reporting currency transactions of 10 000 USD or more. Therefore, criminals often use couriers to make transactions that are below the particular limit and, accordingly, will not be reported to the government. The couriers used to make these transactions are usually called smurfs.
However, if financial institutions are suspicious of structuring deposits of possibly “dirty†money, they are to file a report. If one knowingly and willfully transacts below the defined limit, he/she can and must be convicted of structuring. It means that one is punished if the government can prove that he/she knew that the financial institution is required to file transaction reports and that splitting transactions into many transactions below the limit will let him/ her avoid these reports. However, if there are many smurfs making transactions, it is quite difficult to prove the fact of smurfing.
One of the last cases of smurfing happened in the USA in May, 2006, when a naturalized US citizen from Bangladesh Mohammed Khurshan pleaded guilty to do a remitting business without a license and to fraud. He had sent more than 900 000 USD to a Singapore company in parts just below 10 000 USD – the limit at which banks are required to report the transactions to the US Treasury Department.