Structuring
This article deals mostly with the United States and do not have a worldwide view of the subject. (October 2014) |
Structuring, also called smurfing is a way to cheat in American banking. It is the act of breaking a large sum of money into smaller sums to hide it from the law. Some United States laws, for example the Bank Secrecy Act and Internal Revenue Code say people have to tell the government if they move large amounts of money all at once. By moving the money in smaller amounts, people can sneak past the law. People might structure if they are trying to make criminal money look like honest money or committing fraud.
Definition change
Structuring is the act of dividing a large financial transaction, for example a payment or bank deposit, into many smaller ones to sneak past the law.[1] The structurer, or "smurf," makes sure each smaller sum is lower than the number that the law says must be reported. For example, if the limit is $10,000 in one day, the structurer will move no more than $9,999.99 in one day. groups of criminals sometimes use many smurfs who move money.
The word "smurfing" comes from the Smurfs, which are fictional people from comic books. The Smurf village has a large group of many small people. A Miami lawyer named Gregory Baldwin may be the person who first named structuring "smurfing." People have called it that since the 1980s.[2]
Regulations change
United States change
In the United States, the Bank Secrecy Act says people must write the government currency transaction reports (CTRs) if they buy, sell, or deposit money worth $10,000 or more. This is either in USD or any money from any other country.[3] Financial institutions, for example banks, that think someone might be smurfing have to tell the government about it. They file a suspicious activity report (SAR).[4] In 1986, the U.S. Congress passed a new part of Title 31 of the United States Code:[5]
No person shall, for the purpose of evading the reporting requirements of section 5313 (a) or 5325 or any regulation prescribed under any such section, the reporting or record keeping requirements imposed by any order issued under section 5326, or the record keeping requirements imposed by any regulation prescribed under section 21 of the Federal Deposit Insurance Act or section 123 of Public Law 91–508—[...] (3) structure or assist in structuring, or attempt to structure or assist in structuring, any transaction with one or more domestic financial institutions.
This law also says that people who smurf may be punished with paying their own money, five years in prison, or both.[6] The filing of Form 8300 is required under Internal Revenue Code section 6050I.[7]
If a bank files a suspicious activity report, a judge may issue a warrant. This is a piece of paper that says, in this case, the police or other agents may take the money in the smaller payments and hold it as evidence. Even if the person or business was not really smurfing, they still have to hire lawyers and go to a court of law. This can cost $20,000 or more.
In 2014, The New York Times printed a story about money taken from innocent people in this way. The Internal Revenue Service (IRS) then changed the way it worked.
If a banks thinks a customer is smurfing and files a suspicious activity report, the bank is not allowed to tell the customer about it unless the customer asks. Sometimes bank desk employees will warn customers anyway.[8]
Outside the United States change
| Jurisdiction | Single transaction | Notes |
|---|---|---|
| Australia | AU$10,000 | Australia does not have a rule about how much money a person can move per week or per month. But dividing money into smaller amounts to hide it from the law is always illegale.[9] |
| Brazil | varies | Depends on the type of transaction.[10] |
| Canada | CA$10,000 | People must tell the government any time they move CA$10,000 or more in one day. Some businesses that move money are allowed to use another reporting rule instead: the Alternative to Large Cash Transaction (ALCT) reporting rule.[11] |
| Germany | €15,000 | €10,000 for goods deals.[12] |
| Ireland | €10,000 | Per the 4th EU Anti-Money Laundering Directive (2017)[13] |
| Italy | €12,500 | [14] |
| Netherlands | €15,000 | [15] |
| Sweden | €10,000 | [16] |
| Thailand | US$58,000 | [17] |
Other uses change
The word "smurfing" is also for drugss, for example pseudoephedrine.[18] In this type of smurfing, the agent buys small amounts of legal drugs from many places, then puts the small amounts together to make enough to make the illegal drug methamphetamine.[18] Also, since the monthly pseudoephedrine purchase limits in US are too low for mass meth production, this practice often involves using multiple people, other "smurfs."
As Robert Pennal of the Fresno Meth Task Force explains:
Then we started seeing "smurfing." Remember how the smurfs were little gatherers? We started getting calls from different retail stores that people were buying two or three packs—that's the most you can buy—and they went to one store, they bought three, they went to another store, bought three. We're seeing blister packs everywhere because they're sitting in the car, they're punching the pills out of the blister packs, they're putting them in the freezer bags and they're turning them over to chemical brokers.[19]
Related pages change
References change
- ↑ Linn, Courtney J. (2010). "Redefining the Bank Secrecy Act: Currency Reporting and the Crime of Structuring". Santa Clara Law Review. 50 (2): 407–513.
- ↑ Gross, Samantha; Barrett, Devlin (11 March 2008). "Spitzer Tripped Up on Laws He Enforced". Fox News. Archived from the original on 22 March 2008. Retrieved 14 March 2008.
- ↑ See generally 31 U.S.C. § 5313, 31 U.S.C. § 5324, 31 C.F.R. sec. 1010.311, and 31 C.F.R. sec. 1010.314.
- ↑ See generally 31 C.F.R. sec. 1010.320.
- ↑ See section 1354(a) of the Anti-Drug Abuse Act of 1986, Public Law No. 99-570, 100 Stat. 3207, at 3207-22 (27 October 1986).
- ↑ See 31 USC section 5324(d)(1).
- ↑ Internal Revenue Service (1 June 2006). "Part IV Examining Process; Chapter 26 Bank Secrecy Act; Section 13 Structuring". Internal Revenue Manual. Washington, D.C.: US Treasury Department. OCLC 37305546. Retrieved 11 March 2008.
- ↑ "Law Lets I.R.S. Seize Accounts on Suspicion, No Crime Required" article by Sahaila Dewan in The New York Times 25 October 2014
- ↑ Australian Transaction Reports and Analysis Centre (September 2002). "AUSTRAC Guideline No. 1: Suspect Transaction Reporting" (PDF). Financial Transaction Reports Act 1988. Government of Australia. Archived from the original (.PDF) on 19 November 2016. Retrieved 12 March 2008.
- ↑ Conselho de Controle de Atividades Financeiras. "Lavagem de Dinheiro" (in Portuguese). Ministério da Fazenda. Archived from the original on 3 July 2007. Retrieved 12 March 2008.
- ↑ "Guideline 9: Alternative to Large Cash Transaction Reports to FINTRAC". fintrac.gc.ca. 17 April 2009.
- ↑ "§ 10 GwG - Einzelnorm". www.gesetze-im-internet.de. Retrieved 26 May 2019.
- ↑ http://www.antimoneylaundering.gov.ie/website/aml/amlcuweb.nsf/0/B75E0654ED35762480257F230043F9FE/$File/2014%20Report.pdf
- ↑ Dipartimento del Tesoro. "Antiriciclaggio" (in Italian). Ministero dell'Economia e delle Finanze. Archived from the original on 15 March 2008. Retrieved 12 March 2008.
- ↑ FIU-Nederland. "Meldingen Ongebruikelijke Transacties" (in Dutch). Ministerie van Justitie. Retrieved 12 March 2008.
- ↑ Europa Taxation & Customs Union (21 December 2007). "Cash controls". European Commission. Retrieved 12 March 2008.
- ↑ Netipoom Maysakun. "MONEY LAUNDERING IN THAILAND" (PDF). The United Nations Asia and Far East Institute for the Prevention of Crime and the Treatment of Offenders. Retrieved 15 September 2008.[permanent dead link]
- ↑ 18.0 18.1 "DEA" (PDF). Justice.gov. p. 16. Archived from the original (PDF) on 17 October 2010.
- ↑ "Transcript – The Meth Epidemic". Frontline – PBS.