What is money laundering using cuckoo smurfing?

Cuckoo smurfing involves the money launderer splitting large transactions into multiple small transactions to avoid detection. Money launders break up large sums into numerous small transactions of less than $10,000 thereby avoiding bank compliance and the reporting to AUSTRAC.

Cuckoo smurfing derives its name from the actions of the Cuckoo bird. A cuckoo will take its eggs and place them in the nest of another bird. That bird will then care for the egg until it hatches. In the same way, money launderers use innocent bank customers’ accounts. The ‘Smurfing’ aspect of it comes from recruiting persons to make the structuring deposits.

Often the “Smurfs” will be recruited to deposit the small amounts at different locations or ATMs or bank branches. The “Smurfs” are often not giving the names of those who recruit them and ‘burner phone numbers’ are used so that if the person depositing the money is caught, they will not be able to identify their recruiter.

The “Smurf” deposited monies are saved in bank accounts of what appear to be innocent bank customers. The innocent bank customers effectively become money mules.

The illegal transfer will be made using the details of the innocent bank customer so that it appears to be coming from them and not the criminals. That beneficiary will be an overseas bank account that the criminals’ controls.

The criminals target the vulnerable and desperate to act as Smurfs or money mules. The Smurfs and money mules if convicted of money laundering face the possibility of criminal convictions and/or jail.