What is Smurfing?

Asa Bush

Creative Manager

Smurfing is a form of structuring in which a large sum of money is divided into smaller amounts in order to be distributed to a group of individuals, who then put the money back into the financial system in ways which evade the currency transaction reporting threshold of $10,000. Criminals using this method employ groups of co-conspirators known as “smurfs,” or even occasionally unsuspecting third-party account holders (in a variation known as “Cuckoo Smurfing”). Smurfing, like other forms of structuring, is illegal and investigated by financial compliance AML departments.


First of all, let’s answer the main question on your mind. Smurf? Smurfing? As in, the cartoon TV show?

The answer is…yes! Smurfing – the slang term for a specific form of money laundering – gets its name from the small, blue Smurfs of 1980s cartoonage. The smurfs were famous for dividing up work amongst a large group of individuals, a practice that has been adopted (in a much less friendly fashion) by both drug dealers and money launderers. 

But now that we’ve cleared up that important question, let’s jump into what smurfing is, and why it’s worth knowing about.

What is Smurfing? 

Smurfing is a form of money laundering in which a large sum of money is broken up and distributed to a group of individuals. Each individual is deliberately given an amount below the Currency Transaction Report (CTR) threshold of $10,000 to deposit into their individual accounts. By structuring deposits this way, a criminal organization can move large sums of money into the financial system while remaining below the threshold for reporting.

What’s the difference between Smurfing and Structuring?

While not identical, Smurfing and structuring are very similar. In essence, Smurfing is best thought of as a form of structuring. 

Structuring is the act of breaking up a large sum of money into small chunks in order to avoid triggering a Currency Transaction Report or otherwise attracting the attention of AML professionals or Law Enforcement. Smurfing does the same thing, but uses a group of individuals (“smurfs”) to do so. 

It’s important to note that both structuring and smurfing are illegal. Whether an individual is attempting to launder illicit funds or obscure legitimate funds for tax evasion purposes, working to avoid bank scrutiny is a crime. 

What are some examples of smurfing?

Let’s imagine that a criminal organization has stolen $100,000 from a local bank. (And because this is an imagined example, let’s say that the money is in burlap sacks with a big “$” printed on the side.)

The criminal mastermind in charge of this theft knows that walking around with big bags full of  cash is pretty suspicious. They know they need to find a way to put the stolen money back into the financial system. But they know that simply dumping $100,000 into their checking account (or even depositing $9,000 over several days) will cause a Currency Transaction Report to be filed and put law enforcement on their trail. 

What’s a criminal mastermind to do? What criminal masterminds always do – hire some henchmen (or, in this case, smurfs). 

By breaking up the stolen $100,000 into smaller chunks (say, $5,000 each), the criminal mastermind can then give one apiece to twenty hired “smurfs.” The smurfs (usually spread across different geographies) are then instructed to take their individual deposits and place them into specified bank accounts. At this point, the funds have re-entered the financial system, and can be transferred, layered, or otherwise further laundered in such a way as to end up back in the bank account of the criminal mastermind. 

What is cuckoo smurfing?

Cuckoo smurfing adds an additional wrinkle by involving legitimate account owners as unwitting smurfs in the equation.

An example? Okay, let’s say that a corrupt education company provides tutoring and consulting services. A family pays the company to help tutor their children. The company employs freelance tutors to do this work, and pays them directly. 

Cuckoo smurfing occurs when the corrupt education company receives illicit funds from a criminal organization and uses those funds to pay the tutor their salary. The company can then pay the criminal organization $500 in legitimate funds from the amount paid to them by their clients. The criminal organization has their money laundered, while the unsuspecting tutor is left receiving the proceeds of crime. 

Wrap Up

Smurfing is an advanced form of structuring in which criminals attempt to avoid financial record-keeping safeguards by spreading out large or illicitly-sourced funds across a group of individuals (“smurfs”). By employing a group of people, a large sum of money can be broken up and placed in the financial system in amounts below the reporting threshold. Whether this is done to hide the source of funds, to evade taxes, or by employing unwitting co-conspirators (as in Cuckoo Smurfing), the end result is the same: financial crime. 

Smurfing benefits the more complex its orchestration, which is part of what makes it so hard to identify. But trained AML professionals benefit from a strong awareness of different forms of structuring, as well as increasingly sophisticated transaction monitoring and case management tools.

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