![]() In this instance, the person enlists the help of their friends to make deposits for them. However, let’s say that the same person doesn’t want to report this income on their tax return or wants to hide the fact that the cash has been obtained illegally. As a result, it can backfire if a watchful bank observes a trend of deposits that are all just below the reportable level. Structuring is relatively basic because all the money usually goes into the same account or a small number of accounts that are under the same name. Remember, structuring transactions in this way is illegal. ![]() If they want to avoid reporting requirements, they can split this into 10 transactions of $9,000. Let’s say that someone has $90,000 in cash. To properly demonstrate the differences between structuring and smurfing, let’s look at a couple of examples. Suspicion is frequently avoided since it is difficult to establish a link between the smurfs, the deposits, and the accounts used. Once the money has entered the financial system in this manner, it is then accessible for layering (the second stage of money laundering). Smurfing can be quite complicated, and the process often includes foreign and offshore bank deposits. ![]() Cash obtained illegally is distributed among smurfs, who then make deposits into several different accounts (sometimes under different identities) at a variety of financial institutions. Smurfing is a popular money laundering placement method. It involves using other people (‘smurfs’) to deposit money into multiple accounts. Smurfing is everything structuring is, and more. Although it is a common money laundering tactic, perpetrators also use the technique to evade taxes on legally acquired money and to hide where they generate their money from. Structuring involves intentionally (and for the purpose of avoiding detection/reporting) splitting an amount of money rather than depositing it all in one transaction. What’s the difference between structuring and smurfing?Īlthough some people use the terms interchangeably, structuring and smurfing are different things. To avoid providing the bank with the information required for a CTR, somebody engaged in structuring may split their transactions across several days or deposit the money into different accounts at different banks. ![]() In the United States, a currency transaction report (CTR) must be submitted if a financial institution processes any cash transaction exceeding $10,000. Structuring is when a person deliberately splits a large financial transaction into a series of smaller transactions with the specific aim of avoiding scrutiny from regulators and law enforcement officials.Įach of these smaller transactions is usually for an amount that is just below the limit where a financial institution needs to file a report with a government agency. In doing so, we’ll answer common questions such as ‘what is structuring in money laundering?’, ‘how is structuring different to smurfing?’, and ‘does structuring need to be reported to authorities?’ What do we mean by structuring? In this guide, we’ll specifically look at ‘structuring’. As a result, a number of terms and pieces of jargon are associated with the act of money laundering. Money laundering is a serious financial crime that can be incredibly complex in nature. ![]()
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