Money laundering: Smurf banks large piles of dirty cash, claims innocence
09 Oct 2018

Legal expert and author of ‘Asset Forfeiture Law in the United States’ Stefan Cassella examines a recent case involving a woman in the US who was paid by a drug dealer to be a smurf, transporting and depositing large sums of money into various third party bank accounts. She argued it could not be proven that she knowingly committed the crime, however, the circumstantial evidence presented prevailed.

[In this case], Defendant argued that the evidence was insufficient for the jury to find that she knew the money in question was the proceeds of criminal activity, that she knew the purpose of the transactions was to avoid the currency transaction reporting requirements, and that she willingly agreed to join the conspiracy.

Circumstantial evidence was sufficient to establish a currency courier’s knowledge that the money was criminally derived and that the purpose of depositing it into multiple bank accounts in amounts under $10,000 was to evade the currency reporting requirements.

United States v. Ortiz, 2018 WL 3945604 (E.D. Ky. Aug. 16, 2018).

E.D. Ky. *

Defendant was one of several women paid by a drug dealer to transport large sums of currency from Kentucky to neighboring states and to deposit it into bank accounts in third parties’ names at different banks in amounts of $10,000 or less.

The other women all pled guilty to conspiracy to commit money laundering in violation of Section 1956(a)(1)(B)(ii), but Defendant went to trial on that charge.

She was convicted by a jury and filed a motion for a judgment of acquittal.

Defendant argued that the evidence was insufficient for the jury to find that she knew the money in question was the proceeds of criminal activity, that she knew the purpose of the transactions was to avoid the currency transaction reporting requirements, and that she willingly agreed to join the conspiracy.

The court rejected Defendant’s arguments on all three points. With respect to her knowledge of the source of the money, the court found that there was both direct and circumstantial evidence of Defendant’s knowledge or deliberate ignorance.

Defendant herself admitted to an agent that she knew “something was not right.” A co-defendant testified that she told Defendant that another co-defendant was paid more because he was “dealing with the drugs” and not just the money.

And other witnesses testified that Defendant was present when hundreds of thousands of dollars were counted in preparation for the depositing trips, that the money “literally smelled like drugs,” and that Defendant was paid for depositing the money into third party accounts at multiple bank branches.

Finally, the other co-defendants testified that “it was ‘obvious’ to them that the money came from some form of unlawful activity.”

The circumstantial evidence that Defendant knew the transactions were designed to evade the currency transaction reporting requirements included the co-defendants’ testimony that they knew the deposits had to be kept under $10,000 to “prevent bank tellers from asking questions about the deposits” and that Defendant was instructed not to act suspiciously when making the deposits.

In addition, the court accepted the expert testimony of an IRS agent who opined that Defendant’s activity was consistent with “structuring deposits.” Finally, the court held that the evidence was sufficient for the jury to find that Defendant willingly joined the conspiracy, knowing of its main purpose.

That Defendant may not have played a large role in the conspiracy or that she may not have known its full extent, the court said, was not a reason to set the conviction aside.

So, the motion for judgment of acquittal was denied. SDC

Contact: AUSA Robert Duncan

Comment:

It is interesting to see that smurfing – the money laundering method of choice in the 1980s – is still being used by drug organizations to place drug money into the banking system, and that the statute enacted to deal with it, 18 U.S.C. § 1956(a)(1)(B)(ii), is still an effective tool for prosecuting both the ring leaders and the smurfs themselves. SDC

Stefan Cassella, Asset Forfeiture Law, LLC

www.assetforfeiturelaw.us

PHOTO: This is a file photo and is not linked to the large piles of money mentioned in the article.

Read more:

London: Ex-HSBC employee jailed over £67,000 customer accounts scam

AML three lines of defence: Time for something that works!

Money laundering: Relatives, cars and the willful blindness defence

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