Billions laundered through innocent parties

Organised crime is laundering money through the bank accounts of unsuspecting third parties in a global racket known as "cuckoo smurfing", masking millions in Australia alone Queensland's Crime and Misconduct Commission has detailed how criminal syndicates use stooges and legitimate firms to hide illicit profits. Money monitoring agency Austrac believes crime in Australia generates up to $6.3 billion a year, but that pales against former International Monetary Fund boss Michel Camdessus's estimate that money laundering is worth up to 5 per cent of global gross domestic product, equating to a staggering $56bn here.

Cuckoo smurfing is a new laundering technique employing functionaries, or "smurfs", to deposit black money into the bank accounts of unsuspecting individuals or companies. "The term . . . has its origin in the nesting behaviour of the cuckoo bird," the CMC explained in a report on money laundering issued yesterday. "The cuckoo lays its eggs in the nests of other birds. Similarly, offenders deposit their POC (proceeds of crime) into the accounts of unsuspecting and unrelated third parties. The cuckoo smurfing technique involves a legitimate financial transaction occurring . . . in one direction, and an illegitimate flow of the POC in the other direction.

• "The United Kingdom Threat Assessment odf Organised Crime", SOCA, 2009/10.
  
• "Money Laundering Methodologies", Austrac, 2008.
  
• "Money Laundering & Terrorist Financing Typologies 2004-2005", FATF, 6/10/05.