Smurfing

You know the $10,000 cash reporting threshold?

Criminals know it too.

Their workaround? Smurfing.

What Is Smurfing?

Smurfing (also called "structuring") is breaking large cash amounts into smaller deposits.

Why? To avoid triggering reports.

Instead of: Depositing $50,000 once
They do: Deposit $9,500 five times

Or spread $4,000 across multiple branches. Or use different people.

Why "smurfing"? Like the cartoon — lots of little characters working together. Lots of little transactions flying under the radar.

How It Works

Example 1: The Basic Smurf

A drug dealer has $100,000 in cash.

Instead of one deposit (which triggers AUSTRAC reports), they:

• Deposit $9,000 into Account A
• Deposit $8,500 into Account B (next day)
• Have a friend deposit $7,000 into Account C
• Buy a $9,500 bank cheque at another branch
• Repeat until it's all in the system

Each transaction? Looks innocent.

Together? Money laundering.

Example 2: The Coordinated Smurf

Organized crime recruits "money mules."

These people make deposits for a fee. They might not even know they're laundering money. They think it's a favor or quick cash.

Result: 20 people making $5,000 deposits across the city.

That's $100,000 laundered. No single deposit crosses the threshold.

Red Flags to Watch

What triggers alarms:

1. Just under $10,000

$9,800. $9,500. $9,200.

Consistently avoiding the threshold? Not a coincidence.

2. Multiple branches

Why drive across town to deposit at three banks on the same day?

Normal customers don't do that.

3. Third-party deposits

Different people depositing into the same account.

Especially if they're not family or employees.

4. Timing patterns

Regular deposits on specific days.

Like every Monday (after weekend cash collection from illicit business).

5. Round numbers

Real businesses deposit messy amounts: $9,247.83

Not perfect rounds: $9,000.00

If it's always round? Suspicious.

Why This Matters to You

Running a business that handles cash? Smurfing is your problem.

1. You must detect it

The AML/CTF Act requires transaction monitoring systems.

You need to spot structuring patterns — not just report single transactions over $10,000.

2. You can't look away

"But each deposit was under the threshold!"

Not a defense.

If you suspect structuring, file an SMR. Even if you can't prove it.

3. Criminals will test you

Money launderers target weak monitoring.

Not catching smurfing? You're the easy path.

Real Penalties

Commonwealth Bank (2017): $700 million

• Intelligent deposit machines bypassed alerts
• Criminals made thousands of deposits under threshold
• Monitoring didn't aggregate or flag patterns

Westpac (2019): $1.3 billion

• Failed to monitor international transfer structuring
• Customers broke up large transfers
• Some linked to child exploitation

Not theoretical. Billion-dollar penalties for missing structuring.

How to Detect Smurfing

1. Aggregate by customer

Don't just look at single transactions.

Sum all deposits by the same customer over 24 hours, 48 hours, a week.

Does it add up to a reportable amount?

2. Link related accounts

Look for connections:

• Same address
• Same phone number
• Same IP address
• Same person making deposits

3. Watch for changes

Customer used to deposit $3,000 monthly?

Now depositing $9,500 weekly?

Pattern change worth investigating.

4. Monitor all products

Smurfers mix it up:

• Cash deposits
• Bank cheques
• Money orders
• Different accounts

5. Set alerts below threshold

Don't wait for $10,000.

Set alerts at $8,000, $5,000, or lower for high-risk customers.

Better 10 false positives than one miss.

When You Spot It

File an SMR

Not 100% certain? File anyway.

Explain the pattern. Include dates, amounts, why it's suspicious.

Don't tip off the customer

You cannot tell them you filed an SMR.

Doing so is a criminal offense. Up to 2 years prison.

Complete the transaction normally. File report. Move on.

Document everything

Write down why it's suspicious.

AUSTRAC will review your SMRs. Show your reasoning.

Technology Helps

Manual monitoring doesn't scale.

Processing hundreds of transactions daily? You need automated systems that:

• Aggregate by customer, account, beneficial owner
• Flag structuring patterns
• Alert on threshold-adjacent amounts
• Track across different channels and products
• Generate compliance reports

The Bottom Line

Smurfing is old. But it works.

The only thing stopping it? Businesses like yours taking transaction monitoring seriously.

AUSTRAC's clear: Threshold reporting isn't enough. Detect structuring. Escalate patterns. Take AML seriously.

The alternative cost Westpac and CBA over $2 billion combined.

Getting compliance right is way cheaper.