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.