AMLAssassin's Blog

Money Laundering 101: Structuring and Smurfing

Structuring and Smurfing


            To begin, I would like to clear up a few misconceptions about these two money laundering terms. First, they are NOT synonymous. Smurfing is often a method employed to structure transactions, but many a financial institution’s “structuring” reports have nothing to do with smurfs. Second, while it is likely true that structuring is, by far, the most frequently reported transgression on SARs (Suspicious Activity Reports), the percentages that are quoted are deceiving. On the financial institution’s SAR form, the check box used for perceived structuring instances is titled “Bank Secrecy Act / Structuring / Money Laundering.”  So, as you can see, it is not a clean delineation. I spent a number of years in a pure Anti-Money Laundering Investigative department and virtually every SAR I ever filed had that box checked (among others) – even those that structuring was NOT the issue. So let’s move on to the terms…

STRUCTURING is the act of altering a financial transaction to avoid a reporting requirement. In the United States, any cash deposit or withdrawal in excess of $10,000 (on a single business day) is subject to a currency transaction report (CTR for short). So, if a launderer has $250,000 in cash he needs to get into the financial system, he cannot take it to one bank and deposit it all at once without having to provide the bank with information so they can file a CTR for that deposit. What he will likely then do is have several “runners” go to a series of banks making deposits into a number of different accounts (if he would have 25 $10,000 cash deposits made into the same account on the same day – different branches, different times – the bank would still file a CTR on the transactions AND would file a suspicious activity report as well). These runners are often referred to as “smurfs” – as you researched, named after the little blue characters that moved around their village doing a lot of mindless work.

So SMURFING is the act of using runners to perform multiple financial transactions to avoid the currency reporting requirements. However, it is possible to structure without the use of any smurfs at all. Example: John Smith sells a car and goes to the bank with $14,000 in cash to deposit. He fills out a deposit slip and goes to the teller. As she starts to process the transaction, she states she needs his identification so she can fill out a currency transaction report. Well he is in no mood to let anyone “know his business,” so he asks if he deposits $9,000 will a report need to be filled. The teller tells him that no report would be filled for a $9,000 deposit. So he takes $5,000 back and deposits just $9,000 on that day. Even if he never deposits the remaining $5,000, he altered the original deposit (the taking back of $5,000) and is guilty of structuring – though no smurf was involved.

Many SARs are filed due to public misconceptions about the CTR and its role. While some people are trying to evade taxes, some just don’t want the government to know what they are doing and other have just heard “the word on the street” for so long (since 1970) to avoid any cash transaction over $10,000, they just don’t know any better. Comically, some people are so paranoid or so confused, they won’t even deal in checks or wire transfers over $10,000.

I hope you now have a better understanding of structuring and smurfing. For this and other terms, please visit my website:


One Response to 'Money Laundering 101: Structuring and Smurfing'

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  1. I find the example you give relating to the teller very interesting. The teller has basically aided the person in structuring. Even though a CTR would not be required, wouldn’t you expect the teller to file a SAR?

    I find this to be one of the most vulnerable parts of the process, the front line staff. They are so focused on customer service, that they often fail to see the bigger picture of what they are doing. Criminals are aware of our human weaknesses and play on the most vulnerable points to exploit the system.

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