Money laundering is a federal crime that involves disguising the origins of illegally obtained funds, making them appear legitimate within the financial system. Two common techniques used in this process are smurfing and structuring. While the terms are sometimes used interchangeably, there are key differences in their methods and complexity.

Structuring: The Broader Technique

Structuring, also known as “micro-structuring,” refers to the deliberate division of large financial transactions into smaller amounts to avoid triggering regulatory reporting requirements.

In the United States, the Bank Secrecy Act requires financial institutions to report any transaction over $10,000. Criminals seeking to evade this scrutiny will break up deposits, withdrawals, transfers, or exchanges into amounts just below this threshold.

A single individual can carry out structuring, and it may involve both legal and illegal funds. Its primary aim is to avoid detection by regulators, not necessarily to conceal the illicit nature of the money.

Smurfing: Structuring With a Twist

Smurfing is a more sophisticated form of structuring and involves a network of individuals, often called “smurfs.”

In this scheme, large sums of illicit money are divided among multiple people who each make small deposits or transactions across various accounts, banks, or even locations. Smurfing not only helps avoid reporting thresholds but also complicates the money trail, making it much harder for authorities to trace the source and ownership of the funds.

Smurfing is typically used to conceal the true nature and origin of illegal money, often involving cross-border transactions and multiple accounts.

Why Does It Matter?

Both smurfing and structuring are federal offenses under U.S. law. They undermine the integrity of the financial system and are closely monitored by regulators through advanced anti-money laundering (AML) systems. Understanding the distinction helps financial institutions and law enforcement better detect and prevent illicit financial flows.

Both techniques are illegal and carry severe penalties under federal law, including up to 5 years in federal prison, fines that can rank into the millions, and government seizure of their assets. Moreover, these penalties can be enhanced significantly depending on the nature of the crime charged.

If you have been accused of either smurfing or structuring, you need a strong defense. Contact Sigal Law Group today for a free consultation.