The guidance offers indicators to help financial services firms identify and report suspicious transactions related to cuckoo smurfing.
AUSTRAC has published a new financial crime guide to help financial institutions detect, identify and report suspicious transactions related to cuckoo smurfing.
“Cuckoo smurfing” is a form of money laundering used by criminal syndicates to make illicit proceeds appear to have come from a legitimate source.
It relies on the exploitation of bank accounts of customers expecting to receive legitimate funds from overseas, where the legitimate funds are diverted into the criminals’ account, and illegal money is deposited to customer accounts.
Developed by Fintel Alliance, the new financial crime guide provides specific indicators to help remittance service providers, banking and financial services businesses identify and report suspicious transactions related to cuckoo smurfing.
The indicators and behaviours of this activity include:
- multiple cash deposits in amounts under the AUD 10,000 reporting threshold
- 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
- cash deposits appearing inconsistent with expected transaction activity of the account holder
- the account holder is listed as unemployed, retired or a student
Where financial institutions identify these indicators (among others), they should identify if there is any apparent relationship between the third party depositor and the account holder.
Where possible, financial institutions should engage with overseas counterparts to identify the source of the overseas funds.
If a combination of the indicators is observed and raises suspicion, the matter should be escalated and an SMR (suspicious matter report) should be submitted to AUSTRAC.
“We rely on financial businesses to report to AUSTRAC and partner with enforcement to stop these criminal syndicates and protect members of the Australian community,” said AUSTRAC CEO Nicole Rose.
The financial crime guide is available here.