smurfing
Posted: 21 February 2008 08:32 AM   [ Ignore ]
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I just received an ad for a legal seminar on the topic of “smurfing”—defined as the process in laundering money of breaking down transactions into small dollar components to evade bank controls.  The ad also refers to “micro-smurfing”—which is undefined but I assume means breaking down transactions into very small dollar components for the same purpose.

Has anyone heard of this word before?  Does anyone have any idea how the word came to be used for this purpose?

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Posted: 21 February 2008 08:35 AM   [ Ignore ]   [ # 1 ]
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What in the world could little blue people who like to sing have to do laundering money? :-P

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Posted: 21 February 2008 11:10 AM   [ Ignore ]   [ # 2 ]
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kaiser_soze - 21 February 2008 08:35 AM

What in the world could little blue people who like to sing have to do laundering money? :-P

As it turns out, perhaps, everything. Wikipedia has a pretty interesting article about the meaning of the term.

Edit: fixed broken link

[ Edited: 21 February 2008 02:52 PM by donkeyhotay ]
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Posted: 21 February 2008 12:09 PM   [ Ignore ]   [ # 3 ]
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That Wiki link is broken.

The term is synonymous with “structuring a deposit” and originates from an image of many identical, small transactions, like the many identical, small cartoon characters, The Smurfs.

edit: The board’s software is breaking the link.

[ Edited: 21 February 2008 12:11 PM by happydog ]
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Posted: 21 February 2008 05:25 PM   [ Ignore ]   [ # 4 ]
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I did an an entry for smurfing in 2004, although it could stand revising.

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Posted: 22 February 2008 07:00 AM   [ Ignore ]   [ # 5 ]
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But neither the Wikipedia article nor Grant’s entry explains why the couriers would be called smurfs.

Perhaps it’s simply a derogatory term for an insignificant person, along the lines of peon. A 1985 origin, as per Grant’s list of citations, would put it smack into the middle of the height of Smurf popularity.

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Posted: 22 February 2008 10:17 PM   [ Ignore ]   [ # 6 ]
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The Supreme court dealt with the issue of “structuring” in 1994 in “Ratzlaf v. United States” but surprisingly avoided the term “smurfing.” Clearly an omission on their part:

On the evening of October 20, 1988, defendant petitioner Waldemar Ratzlaf ran up a debt of $160,000 playing blackjack at the High Sierra Casino in Reno, Nevada. The casino gave him one week to pay. On the due date, Ratzlaf returned to the casino with cash of $100,000 in hand. A casino official informed Ratzlaf that all transactions involving more than $10,000 in cash had to be reported to state and federal authorities. The official added that the casino could accept a cashier’s check for the full amount due without triggering any reporting requirement. The casino helpfully placed a limousine at Ratzlaf’s disposal, and assigned an employee to accompany him to banks in the vicinity. Informed that banks, too, are required to report cash transactions in excess of $10,000, Ratzlaf purchased cashier’s checks, each for less than $10,000 and each from a different bank. He delivered these checks to the High Sierra Casino.

Based on this endeavor, Ratzlaf was charged with “structuring transactions” to evade the banks’ obligation to report cash transactions exceeding $10,000; this conduct, the indictment alleged, violated 31 U.S.C. §§ 5322(a) and 5324(3). The trial judge instructed the jury that the Government had to prove defendant’s knowledge of the banks’ reporting obligation and his attempt to evade that obligation, but did not have to prove defendant knew the structuring was unlawful. Ratzlaf was convicted, fined, and sentenced to prison. [n.2]

Ratzlaf maintained on appeal that he could not be convicted of “willfully violating” the antistructuring law solely on the basis of his knowledge that a financial institution must report currency transactions in excess of $10,000 and his intention to avoid such reporting. To gain a conviction for “willful” conduct, he asserted, the Government must prove he was aware of the illegality of the “structuring” in which he engaged. The Ninth Circuit upheld the trial court’s construction of the legislation and affirmed Ratzlaf’s conviction. 976 F. 2d 1280 (1992). We granted certiorari, 507 U. S. ___ (1993), and now conclude that, to give effect to the statutory “willfulness” specification, the Government had to prove Ratzlaf knew the structuring he undertook was unlawful. We therefore reverse the judgment of the Court of Appeals.

Congress enacted the Currency and Foreign Transactions Reporting Act (Bank Secrecy Act) in 1970, Pub. L. 91-2508, Tit. II, 84 Stat. 1118, in response to increasing use of banks and other institutions as financial intermediaries by persons engaged in criminal activity. The Act imposes a variety of reporting requirements on individuals and institutions regarding foreign and domestic financial transactions. See 31 U.S.C. §§ 5311-5325. The reporting requirement relevant here, § 5313(a), applies to domestic financial transactions. Section 5313(a) reads:

But Justice Blackmun got off a pretty good pun in his dissent:

The petitioner in this case was informed by casino officials that a transaction involving more than $10,000 in cash must be reported, was informed by the various banks he visited that banks are required to report cash transactions in excess of $10,000, and then purchased $76,000 in cashier’s checks, each for less than $10,000 and each from a different bank. Petitioner Ratzlaf, obviously not a person of limited intelligence, was anything but uncomprehending as he travelled from bank to bank converting his bag of cash to cashier’s checks in $9,500 bundles. I am convinced that his actions constituted a “willful” violation of the antistructuring provision embodied in 31 U.S.C. § 5324. As a result of today’s decision, Waldemar Ratzlaf--to use an old phrase--will be ”laughing all the way to the bank.”

The majority’s interpretation of the antistructuring provision is at odds with the statutory text, the intent of Congress, and the fundamental principle that knowledge of illegality is not required for a criminal act. Now Congress must try again to fill a hole it rightly felt it had filled before. I dissent.

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Posted: 11 March 2008 10:18 PM   [ Ignore ]   [ # 7 ]
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The term has been prominent in the last few days in connection with Governor Spitzer. And note this from Breitbart:

Spitzer of all people should have known that, said Miami-based lawyer Gregory Baldwin, credited with coining the term “smurfing” .... as a federal prosecutor.

NB the points of ellipsis indicate the omission of the words in the from the original. There’s clearly an error here; leaving the two words out is the best sense I can make of it.

Credited by whom, one wonders. There’s no mention of the guy in Grant’s entry for the word.

This is he.

Gregory A Baldwin

It’s certainly an impressive legal resume and the man was certainly involved in the right legal area at the right time to lend weight to any accreditation of the term to him.

Edited for clarity.

[ Edited: 12 March 2008 08:26 AM by aldiboronti ]
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Posted: 12 March 2008 07:05 AM   [ Ignore ]   [ # 8 ]
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NB the points of ellipsis indicate the omission of the words in the from the original. There’s clearly an error here; leaving the two words out is the best sense I can make of it.

For those who found this comment as mystifying as I did, read:

NB the points of ellipsis indicate the omission of the words “in the” from the original. There’s clearly an error here; leaving the two words out is the best sense I can make of it.

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Posted: 12 March 2008 08:25 AM   [ Ignore ]   [ # 9 ]
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Sorry, my bad. I’d initialized the omitted words originally, then got the bright idea to initialize the whole comment; the result, of course, being utter confusion. I’ll edit the post now.

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Posted: 13 March 2008 02:48 AM   [ Ignore ]   [ # 10 ]
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By initialize you mean italicize?

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Posted: 13 March 2008 05:03 AM   [ Ignore ]   [ # 11 ]
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Faldage - 13 March 2008 02:48 AM

By initialize you mean italicize?

Slowly bangs head against wall.

Not my day yesterday. Yes, I did.

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Posted: 13 March 2008 06:10 AM   [ Ignore ]   [ # 12 ]
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I thought about pointing that out but I was concerned about damage to your head.

*hands aldi an icepack*

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