Money Laundering, Terrorism and Financial Institutions - USA Patriot Act Monitor

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09/13/2010 Cuckoo Smurfing Requires Sophistication, But Is Increasing In Some Financial Systems The tactic was originally identified by Australian authorities in 2008.

The Financial Action Task Force has issued a global threat report describing money laundering and terrorism financing threats, looking particularly at new trends. The FATF mentions a technique previously described in a 2008 Australian money laundering methodologies report called "cuckoo smurfing." The technique takes its name from the cuckoo bird, said to lay its eggs in the nests of birds of other species so as to let those birds keep the eggs warm until hatching. Cuckoo smurfing, according to the Australian report, consists of the following:

Using this requires an innocent customer, who may be in Australia or overseas, a criminal alternative remitter located overseas, an Australian criminal seeking to transfer funds overseas, an organizer or coordinator in Australia, and associates of this organizer who make third-party deposits to the Australian customer’s account. The number of players involved argues that this technique will remain of limited utility in the financial world, but in closely watched systems it may become an attractive alternative.

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