| To begin, I would like to clear up a few | | | | AND would file a suspicious activity report as well). |
| misconceptions about these two money laundering | | | | These runners are often referred to as |
| terms. First, they are NOT synonymous. Smurfing is | | | | “smurfs” – as you researched, named |
| often a method employed to structure transactions, | | | | after the little blue characters that moved around |
| but many a financial institution’s | | | | their village doing a lot of mindless work. |
| “structuring” reports have nothing to do with | | | | So SMURFING is the act of using runners to perform |
| smurfs. Second, while it is likely true that structuring | | | | multiple financial transactions to avoid the currency |
| is, by far, the most frequently reported transgression | | | | reporting requirements. However, it is possible to |
| on SARs (Suspicious Activity Reports), the | | | | structure without the use of any smurfs at all. |
| percentages that are quoted are deceiving. On the | | | | Example: John Smith sells a car and goes to the bank |
| financial institution’s SAR form, the check box | | | | with $14,000 in cash to deposit. He fills out a deposit |
| used for perceived structuring instances is titled | | | | slip and goes to the teller. As she starts to process |
| “Bank Secrecy Act / Structuring / Money | | | | the transaction, she states she needs his |
| Laundering.” So, as you can see, it is not a | | | | identification so she can fill out a currency transaction |
| clean delineation. I spent a number of years in a pure | | | | report. Well he is in no mood to let anyone |
| Anti-Money Laundering Investigative department and | | | | “know his business,” so he asks if he |
| virtually every SAR I ever filed had that box checked | | | | deposits $9,000 will a report need to be filled. The |
| (among others) – even those that structuring | | | | teller tells him that no report would be filled for a |
| was NOT the issue. So let’s move on to the | | | | $9,000 deposit. So he takes $5,000 back and |
| terms… | | | | deposits just $9,000 on that day. Even if he never |
| STRUCTURING is the act of altering a financial | | | | deposits the remaining $5,000, he altered the original |
| transaction to avoid a reporting requirement. In the | | | | deposit (the taking back of $5,000) and is guilty of |
| United States, any cash deposit or withdrawal in | | | | structuring – though no smurf was involved. |
| excess of $10,000 (on a single business day) is | | | | Many SARs are filed due to public misconceptions |
| subject to a currency transaction report (CTR for | | | | about the CTR and its role. While some people are |
| short). So, if a launderer has $250,000 in cash he | | | | trying to evade taxes, some just don’t want the |
| needs to get into the financial system, he cannot | | | | government to know what they are doing and other |
| take it to one bank and deposit it all at once without | | | | have just heard “the word on the street” |
| having to provide the bank with information so they | | | | for so long (since 1970) to avoid any cash transaction |
| can file a CTR for that deposit. What he will likely | | | | over $10,000, they just don’t know any better. |
| then do is have several “runners” go to a | | | | Comically, some people are so paranoid or so |
| series of banks making deposits into a number of | | | | confused, they won’t even deal in checks or |
| different accounts (if he would have 25 $10,000 cash | | | | wire transfers over $10,000. |
| deposits made into the same account on the same | | | | I hope you now have a better understanding of |
| day – different branches, different times – | | | | structuring and smurfing. |
| the bank would still file a CTR on the transactions | | | | |