Pubdate: Mon, 07 Nov 2005 Source: Globe and Mail (Canada) Copyright: 2005, The Globe and Mail Company Contact: http://www.globeandmail.ca/ Details: http://www.mapinc.org/media/168 Author: Colin Freeze AUTHORITIES CATCHING UP TO DIRTY MONEY 'SMURFERS' Crooks 'Wash' Smaller Sums To Evade Law It's a term U.S. authorities use to describe how some criminals try to launder money. Now "smurfing" has entered the official lexicon of Canadian authorities, making an appearance in last week's report by FINTRAC, a federal government agency fighting financial crime. "Smurfing is trying to make financial transactions below the reportable threshold," explains Peter Lamey, a spokesman for the Financial Transactions and Reports Analysis Centre of Canada. By law, banks and other financial agencies must flag certain deposits that exceed $10,000 and notify the government, which wants to keep an eye out for crooks seeking to wash large sums of dirty money. Yet there are ways around the rules: Criminal gangs can make many small bank deposits instead of a few big ones. They can also have their henchmen go to casinos and buy up lots of chips, and then eschew card games in favour of redeeming them into ostensible gambling windfalls. Such smurfing has emerged as a serious concern for FINTRAC, which says it has spotted at least one such criminal gang. "They were redeeming casino cheques from casino chips purchased by other individuals -- evidence of a money laundering technique known as smurfing," the agency says in its latest annual report. The casino network's proceeds went toward "the purchase of houses suspected of being used as marijuana grow operations," the report says. Mr. Lamey said smurfers are eventually brought to justice. "Smurfing is not bulletproof," he says. But these days, there's a whole lot of smurfing going on, partly because the term is being expanded to include other criminal behaviour. For example, U.S. senators cited the practice of "smurfing" when they passed a bill this fall. The legislation bans people from buying up lots of little boxes of cold-medicine ingredients that can be ground up to make large quantities of illegal methamphetamine. The FINTRAC report also states that the agency picked up on three times as much money being transferred last year to terrorists and crooks compared to what they noticed in 2003. The laundering of drug money and that derived from fraud accounts for most of the suspicious transactions that, for the first time, the report says, has reached into the billions. In 2004, Canadian authorities flagged more than $2-billion worth of dirty money, up from $700-million the previous year. Cases involving the financing of terrorists and other security risks account for part of the surge, doubling to $180-million this year. "The cases are just bigger," Mr. Lamey said. Created five years ago by the federal government as a response to organized crime, the centre is seeing a steady increase in curious transactions, a trend that grows with the agency's experience in probing suspicious money transfers. FINTRAC's accountants and computer whizzes get their tips from banks, other financial institutions and casinos. - --- MAP posted-by: Beth