Austrac has issued an alert to banks and their customers warning that a form of money laundering called “cuckoo smurfing” is becoming more prevalent, warning that and they need to be more diligent in checking account activity.
In a typical case of cuckoo smurfing, an overseas customer deposits funds with a remitter to send to an Australian account. The remitter is corrupt and, acting on behalf of a criminal group, does not send the money to the Australian account.
The criminal group notifies its Australia “smurf” of the amount of funds supposedly transferred and the account details. The smurf collects cash from the local representative of the criminal group and deposits it in the “cuckoo’s” account.
Once those funds have been deposited the corrupt remitter gives the funds that were to have been sent to Australia to the criminal group. In this way payment for a shipment of drugs, for example, is paid to the suppliers.
Austrac chief executive Nicole Rose said the local account holders are usually unaware that the funds being transferred into their accounts are the proceeds of crime.
She said that if business become aware of activity that may be cuckoo smurfing they must report it. Such activity includes cash deposits made on the same day in multiple branches and multiple cash deposits in amounts under A$10,000.
Consumers are being advised to carefully check transactions that involve funds from overseas. Red flags include deposits that are inconsistent with expected activity and deposits from multiple third parties.
Austrac said the groups most at risk are Australian expatriates sending money home, Australian exporters, international students studying in Australia and investors with overseas holdings.