Proceeds of Crime – ‘cuckoo smurfing’ further case law consideration


On 17 December 2020 in Commissioner of the Australian Federal Police v Tjongosutiono [2020] NSWSC 1815, further judicial consideration was given to the interpretation of section 330(4) of the Proceeds of Crime Act 2002 (Cth) and its interaction with ‘cuckoo smurfing’ as a money laundering technique used in Australia.

In this case, Mr Tjongosutiono had remitted money to Australia from overseas using a money remitter and the amounts were deposited into his bank account in Australia as requested but in smaller amounts rather than one lump large sump. The usual purpose of this is to avoid statutory reporting requirements of amounts transacted above $10,000. It should be noted that purposefully structuring transactions to avoid the $10,000 statutory reporting threshold is an offence in itself being contrary to section 142 of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth).

Mr Tjongosutiono said that he was unaware that the amount deposited into his account as requested was deposited in smaller amounts rather than a lump sum as he never checked the transactions of deposits into his account and merely looked at the balance of the account on the home screen of his internet banking. In other words, he proclaimed ignorance to the fact that there were multiple deposits of smaller amounts. For a number of reasons, Justice Harrison of the Supreme Court of NSW was not satisfied that Mr Tjongosutiono was unaware of the smaller deposits into his bank account. Mr Tjongosutiono’s case was distinguished from the recent case of Gwe v Commissioner of the AFP [2020] NSWCA 247 on the factual scenario of Mr Tjongosutiono’s case.

His Honour was not satisfied that Mr Tjongosutiono acquired the relevant property in circumstances that would not arouse a reasonable suspicion that it was proceeds of an offence or an instrument of an offence. His Honour found on that basis that Mr Tjongosutiono had not discharged the onus that he bore regarding the exclusion from restraint application.

Whilst being a single judge decision of the Supreme Court of NSW and not necessarily binding on other matters that come before the Court, the takeaway from this is that individuals remitting money to Australia need to be actively aware to any knowledge of nefarious activity associated with their money transfer. That is, they need to be aware of the unusualness of a number of smaller deposits making up the total amount of money remitted, even if they are not necessarily aware that structuring deposits is an offence in itself in Australia.

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* Information contained in this article is of a general nature only and should not be relied upon as concise legal advice.
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About Brian Walker

B.Acc., GradDipLegPrac, Juris Dr Barrister & Accountant. Former Criminal Defence Solicitor. Former Federal Prosecutor for the Commonwealth Director of Public Prosecutions prosecuting Commonwealth crimes relating to drugs and child exploitation. Former Australian Federal Police member litigating proceeds of crime matters. Former Australian Taxation Office employee investigating offshore tax evasion matters.

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