[Ads-l] Slang: smurfing, smurf (domain financial transactions in 1984)

[Baker, John]

Here is an early discussion of the term in a congressional hearing:

Ms. Kaptur.  I remember their answer.  I was a little bit surprised.
              Do you happen to know where the term smurfing came from.  Isn’t smurf that blue icecream that they sell?  Is that where the term came from?
Mr. Keating.  That’s my understanding.  That was asked during the break here and I found out from Mr. Stankey that that was the origin of the term.  What relevance that has to the practice, I don’t know, but I understand that’s where it came from.
Ms. Kaptur.  Mr. Stankey, do I take it you might have an opinion on that?
Mr. Stankey.  As I understand it, it originated in the cases in Florida where they had a number of people involved in laundering small amounts of money, the little people in the organization  And someone said, well, they’re like smurfs.  They’re running around every place.
Ms. Kaptur.  Oh.  So it comes not from blue icecream, but from little smurfs.
Mr. Serino.  The cartoons, the smurfs.
Ms. Kaptur.  Oh.  All right.  I get it.  This is not something I’m real familiar with.  [Laughter.]

Tax Evasion, Drug Trafficking and Money Laundering as They Involve Financial Institutions:  Hearings Before the Subcomm. on Financial Institutions Supervision, Regulation and Insurance of the House Comm. on Banking, Finance and Urban Affairs, 99th Cong. 655 (1986), https://books.google.com/books?id=2YWHJfRYGZ0C.  This is from the hearings held on April 17, 1986.  Ms. Kaptur is Rep. Marcy Kaptur (D – Ohio), a member of the subcommittee.  Mr. Keating is Francis A. Keating II, Assistant Secretary (Enforcement and Operations), U.S. Dept. of the Treasury.  Mr. Stankey is Robert Stankey, Acting Director of the Office of Financial Enforcement, U.S. Dept. of the Treasury.  Mr. Serino is Robert B. Serino, Deputy Chief Counsel (Operations), Office of the Comptroller of the Currency, U.S. Dept. of the Treasury.

Some sources, including the Wikipedia article on Structuring (a broader and more formal term that includes smurfing, although the article inaccurately describes the two terms as synonyms), credit the term to Gregory Baldwin, a lawyer who practiced in the money laundering area.  These credits are noncontemporaneous, and I note that Baldwin was not admitted to practice law in Florida until 1986, after the term was already in use; this is not proof that he was not the originator, but it does not support his case.

Although the money laundering use of smurfing seems to have been the original metaphorical use of the term, it has been expanded to other areas, such as online gaming (World of Warcraft).


John Baker


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Subject: Slang: smurfing, smurf (domain financial transactions in 1984)

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On x-twitter Barry Popik asked about the provenance of the slang term
"smurfing" which refers to strategies used to obfuscate large
financial transactions. The general idea is to convert a single large
transaction into multiple small transactions which are less likely to
trigger systems which monitor the financial system to detect illegal
transactions. For example, financial institutions typically must
report transactions which result in either cash-in or cash-out
totaling more than $10,000 dollars.

Here is an excerpt from a 1986 article that helps to explain one type
of smurfing.

Date: April 17, 1986
Newspaper: Austin American-Statesman
Newspaper Location: Austin, Texas
Article: Bill Targets loss to cash laundering
Author: Seth Kantor (Austin-Statesman Staff)
Quote Page A12, Column 1 to 3
Database: Newspapers.com
https://www.newspapers.com/image/363721116/?match=1&terms=smurfing<https://www.newspapers.com/image/363721116/?match=1&terms=smurfing>

[Begin excerpt]
Legislation sponsored by Pickle and endorsed by the Reagan
administration would give more teeth to current law so that the
criminal mob runners, known as "smurfs," can be convicted, laundered
money can be seized by the government, and bankers who "willfully
violate" the law's reporting requirements will face new civil
penalties.
. . .
"Money would come into Mr. Behar's office in duffel bags," Friedberg
said. Friedberg said he would handle "as much as $100,000 in cash a
day." Going from financial institution to financial institution,
Friedberg said, he would convert $9,000 chunks of cash to cashier's
checks that would be laundered by the Behar operation through foreign
banks.

Federal law requires that any cash transaction of $10,000 or more be
reported to federal authorities by the bank or savings and loan
institution involved.
. . .
Friedberg, 53, said he read an article about illegal smurfing and "I
immediately knew that I had been an unknowing participant in this type
of money-laundering activity."
[End excerpt]

Here is the earliest match I found for "smurfing" with the pertinent
sense in the newspapers.com database.

Date: June 1, 1984
Newspaper: Kingsport Times-News
Newspaper Location: Kingsport, Tennessee
Article: Crime probe bill may benefit area
Author: Rod Franklin (Times-News Staff Writer)
Quote Page 3A, Column 4
Database: Newspapers.com
https://www.newspapers.com/image/595383364/?match=1&terms=smurfing<https://www.newspapers.com/image/595383364/?match=1&terms=smurfing>

[Begin excerpt]
The usual scheme he explained, is to set up what organized crime calls
a "smurfing" operation. Latinos -- many of whom have been run out of
Florida since federal police began pressuring drug traffickers --
exchange "dirty" drug money for cashier's checks at area banks. They
then export the checks illegally to other countries to buy guns and
other things for the organized-crime community, said Dedrick.
[End excerpt]

Barry Popik was asking about a different type of "smurfing" in which a
large political campaign contribution is broken into a set of small
contributions.

Apparently, the slang term "smurfing" was inspired by the diminutive
Smurf comic characters.

[Begin excerpt from Wikipedia]
The Smurfs is a Belgian comic franchise centered on a fictional colony
of small, blue, humanoid creatures who live in mushroom-shaped houses
in the forest. The Smurfs was created and introduced as a series of
comic characters by the Belgian comics artist Peyo (the pen name of
Pierre Culliford) in 1958, wherein they were known as Les Schtroumpfs.
[End excerpt from Wikipedia]

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