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How Financial “Smurfing” Can Get You Into Trouble

July 3, 2017 By Jeff King

Financial smurfing is a colloquial term used by government officials for money laundering in which a person initiates a series of financial transactions under the reporting threshold of $10,000 to transport offshore, to another bank, or to a criminal in the form of “clean money” to avoid reporting requirements and law enforcement.

 

How is smurfing done?

 

Money laundering begins with “dirty money.” Income that is not reported to the IRS is considered “dirty,” even if it was gained through legal, but under-the-table, employment. Money can also be “dirty” through illegal means, such as drug sales, smuggling, prostitution, gambling, bribery, extortion, or human trafficking.

 

Smurfing is often done by people involved in drugs, extortion, illegal real estate purchases, currency manipulation, or gambling. In the drug world, money obtained illegally through drug manufacturing is then laundered through a network of smurfs who convert the currency into “clean” money. The smurfs seek to separate the money from its original source by moving electronic funds to different or overseas bank accounts, investing in advanced financial options, or purchasing money orders and cashier’s checks. Finally, the money is returned to the original source through a property transaction or high-end sales of art, jewelry, or automobiles.

 

Why is financial smurfing illegal?

 

Most structuring cases stem from the Bank Secrecy Act of 1970, a law stipulating that banks must report any deposits, withdrawals, or transfers exceeding $10,000. The goal was to shed light on criminal activity.

 

Even if the money was not obtained through illegal activities, the goals of money laundering and financial smurfing are generally to:

 

  • Hide personal property and wealth from tax collectors, divorce courts, and authorities.
  • Convert cash into money orders, cashier’s checks, gold, stamps, or property for illegal activities.

 

What is the difference between financial structuring and smurfing?

 

Sometimes “smurfing” activity involves no smurfs at all and can be done by an individual – in which case it may be referred to as “financial structuring.” It can be a fine line for some people and businesses. For instance, if you’re a bartender or waiter who earns $2,000-$2,500 a week in tips and makes monthly deposits less than $10,000 – this isn’t in itself isn’t illegal, but if you are doing so because you don’t want your bank to report the money to the government, it is.

 

If you’re a business owner just getting started, you might make a series of deposits under $10,000, but once your enterprise grows you may find the teller reported you to the federal government – something that you may not feel comfortable with, even if you’ve done nothing wrong.

 

Often, financial structuring is sometimes done by individuals who wish to protect themselves from government intrusion. Technically, if you had $10,000 to deposit into a bank account and chose to only put in $9,999 to avoid reporting, you’re guilty of structuring.

 

Call Jeff King if you’re facing money laundering charges in Texas!

 

Have you been charged with financial structuring, smurfing, or money laundering? Money laundering is punishable by a fine and up to five years in federal prison. To make matters worse, the assets seized often become government property, further compounding an individual’s loss.

 

Sometimes good people make mistakes. Sometimes law enforcement gets it wrong. Either way, you may need a lawyer to clear your good name.

 

Texas Attorney Jeff King has over 14 years of legal experience on both sides of the aisle. Over the years, he has developed a sterling reputation in the criminal defense arena. His passion is in defending the rights of the accused. Through an in-depth understanding of financial law and diligent preparation of every case as if it’s going to trial, Texas money laundering defense attorney Jeffrey King gives you a distinct advantage and the strong, aggressive defense you expect from a former marine.

 

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