AUSTRAC: How to Detect & Report Cuckoo Smurfing

‘Cuckoo smurfing’ is a method of money laundering used by criminals to move funds across borders and make money generated by their illegal activities appear to have come from a legitimate source.

AUSTRAC has released a new financial crime guide to warn businesses and their customers about the dangers of this money laundering method.

Cuckoo smurfing is facilitated by professional money laundering syndicates who work with a corrupt remitter based overseas.

The corrupt remitter:

• accepts an instruction from a customer to make a payment to an Australian-based beneficiary customer
• hijacks the money transfer coming into Australia in order to place funds in the Australian-based beneficiary account which are sourced from criminal activity.

Generally, the beneficiary customer receiving the funds is expecting legitimate funds to be deposited into their account, and is not aware the funds transferred are the proceeds of crime.

However, there have been some instances where the Australian beneficiary customer was aware of the suspicious activity occurring on their account and wilfully ignored the activity. There have been other instances where a person overseas has intentionally engaged a corrupt remittance service provider to send funds to their own accounts in Australia to avoid capital controls or tax laws in a foreign jurisdiction. Read more on AUSTRAC’s website

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AUSTRACCuckoo Smurfing