cuckoo smurfing.::
In 2005, FATF added a new term to the vast money laundering
lexicon – “cuckoo smurfing.
The term, mentioned in the organization’s 2005 Typologies Report,
refers to a form of money laundering linked to alternative
remittance systems, in which criminal funds are transferred through
the accounts of unwitting persons who are expecting genuine
funds or payments from overseas. The term cuckoo smurfing first
originated in investigations in the United Kingdom, where it is a
significant money laundering technique.
The cuckoo is a European bird that is a parasite because it lays
its eggs in the nests of other birds, which hatch them and rear
the offspring. The main difference between traditional structurer
and cuckoo smurfing is that in the latter the third parties who hold
the bank accounts being used are not aware of the fact that illicit
money is being deposited into their accounts.
Cuckoo smurfing requires the work of an insider within a financial
institution and is generally a four step process:
The first step occurs when a customer provides funds
to an alternative remitter for transfer to a beneficiary,
generally in another country.
The next step involves the insider, who will provide the
transaction details (beneficiary name, bank, account
number and amount) of the transfer to an associate
in the foreign country where the beneficiary of the
transfer is located. The associate in the foreign country
will have cash that needs to be placed into the financial
system.
The associate in the foreign country will then deposit
cash into the bank account of the intended beneficiary.
The beneficiary will receive the full amount of the
transfer and the associate in the foreign country will be
able to place some of its cash into the financial system.
The associate in the foreign country then arranges to
get the funds from the alternate remitter, using one
of the methods by which alternate remitters transfer
funds. In this case, the associate in the foreign country
will have laundered the funds and will have legitimate
funds to replace the criminally derived ones deposited
into the beneficiary’s account.
In 2005, FATF added a new term to the vast money laundering
lexicon – “cuckoo smurfing.
The term, mentioned in the organization’s 2005 Typologies Report,
refers to a form of money laundering linked to alternative
remittance systems, in which criminal funds are transferred through
the accounts of unwitting persons who are expecting genuine
funds or payments from overseas. The term cuckoo smurfing first
originated in investigations in the United Kingdom, where it is a
significant money laundering technique.
The cuckoo is a European bird that is a parasite because it lays
its eggs in the nests of other birds, which hatch them and rear
the offspring. The main difference between traditional structurer
and cuckoo smurfing is that in the latter the third parties who hold
the bank accounts being used are not aware of the fact that illicit
money is being deposited into their accounts.
Cuckoo smurfing requires the work of an insider within a financial
institution and is generally a four step process:
The first step occurs when a customer provides funds
to an alternative remitter for transfer to a beneficiary,
generally in another country.
The next step involves the insider, who will provide the
transaction details (beneficiary name, bank, account
number and amount) of the transfer to an associate
in the foreign country where the beneficiary of the
transfer is located. The associate in the foreign country
will have cash that needs to be placed into the financial
system.
The associate in the foreign country will then deposit
cash into the bank account of the intended beneficiary.
The beneficiary will receive the full amount of the
transfer and the associate in the foreign country will be
able to place some of its cash into the financial system.
The associate in the foreign country then arranges to
get the funds from the alternate remitter, using one
of the methods by which alternate remitters transfer
funds. In this case, the associate in the foreign country
will have laundered the funds and will have legitimate
funds to replace the criminally derived ones deposited
into the beneficiary’s account.
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