Smurfing

smurfs

Structuring, also known as smurfing in banking industry jargon, is the practice of parceling what would otherwise be a large financial transaction into a series of smaller transactions to avoid scrutiny by regulators or law enforcement. Structuring often appears in federal indictments related to money laundering, fraud, and other financial crimes. The term ‘smurfing’ is derived from the image of the cartoon characters, the ‘Smurfs,’ having a large group of many small entities. Miami-based lawyer Gregory Baldwin is said to have coined the term in the 1980s.

Typically each of the smaller transactions is executed in an amount below some statutory limit that normally does not require a financial institution to file a report with a government agency. Criminal enterprises often employ several agents (smurfs) to make the transaction. The term is also applied to activity associated with controlled substances such as pseudoephedrine. In this context the agent will make purchases of small, legal amounts from several drug and grocery stores, with the intent to aggregate the lot for use in the illegal production of methamphetamine.

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