Cuckoo Smurfing – Protect Yourself From This Money Laundering Scheme

If you send or receive money from overseas using a money transfer business, you may be at risk of criminals targeting your bank account using ‘cuckoo‑smurfing’.

Cuckoo smurfing is a method of money laundering used by criminals to make money generated by criminal activities appear to have come from a legitimate source.

Organised criminals use professional money laundering syndicates to target the bank accounts of people receiving money transfers in Australia. The deposits are made into the Australian account (the ‘cuckoo’s nest’) are often made by cash mules (‘smurfs’) in amounts less than $10,000 in an attempt to avoid threshold transaction reporting. In most instances, customers are often unaware that the funds transferred into their accounts are the proceeds of crime.

What are the warning signs?

Look out for and report unexpected and suspicious activity occurring in your bank account, including:

  • multiple cash deposits in amounts under $10,000
  • multiple cash deposits made on the same day or within a short period
  • cash deposits made across various branches and ATMs, including across different states
  • cash deposits from multiple third parties.

Who is a target?

You could be at risk if you are expecting a money transfer from overseas involving a money transfer business. This includes:

  • Australian expatriates
  • Australian exporters
  • International students studying in Australia
  • International investors
  • Migrants wishing to settle in Australia.

How to protect yourself?

Only deal with, or request funds to be sent through legitimate financial institutions or money transfer businesses. If you’re expecting to receive funds from overseas, review your bank account activity and report any suspicious transactions.

If you notice any suspicious activity occurring in your bank account, including the warning signs above, you should immediately report it to your bank.

If you have any questions or would like to know more about the ‘Cuckoo Smurfing Scheme’, get in contact with a team member at Morrows.

Image source: Shutterstock (1291856800)

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