Financial crime regulator warns about the world of ‘cuckoo Smurfing’
Karen Tan, 07 June 2021
You might not have heard of it before, or even know what it is, but “cuckoo Smurfing” is a sneaky way organised criminals engage in money laundering, by exploiting the legitimate bank accounts of individuals and businesses in Australia.
It is used to move illegal funds into Australia and disguise profits from criminal activities. The key targets appear to be Australian expatriates and exporters, international students studying in Australia, international investors and migrants wishing to settle in Australia.
When Australia’s financial crime regulator, AUSTRAC, released its new financial crime guide last week (3 June 2021), it warned businesses and consumers about the “cuckoo Smurfing” method, and described it as a “sinister practice with an endearing name.”
It’s not wrong.
In a statement, AUSTRAC said the Australian account holder will commonly be expecting genuine funds to be deposited into their account from a friend, relative or business partner overseas.
Often these recipients are unaware that the funds transferred into their accounts have in fact come from criminals using funds generated from drug dealing and other serious criminal activities.
AUSTRAC’s new financial guide helps businesses know how to spot the illegal activity and report it to AUSTRAC.
The launch coincides with new educational materials developed by the Australian Federal Police (AFP), in collaboration with AUSTRAC, to further assist consumers protect themselves from cuckoo Smurfing.
The AFP fact sheet says you need to first be aware of the activity, and how it works, and protect yourself accordingly.
“The deposits into the Australian account (the ‘cuckoo’s nest’) are often made by cash mules (‘Smurfs’) in amounts less than $10,000,” it says.
“It is a criminal offence to deliberately split large transactions into smaller amounts of less than $10,000 in an attempt to avoid threshold transaction reporting.”
