Keeping under the radar: watch out for “Smurfs”

Pages152-162
DOIhttps://doi.org/10.1108/13590791011009428
Published date05 January 2010
Date05 January 2010
AuthorWilliam Tupman
Subject MatterAccounting & finance
SECTION III. RE-EVALUATING THREATS
AND RESPONSES
Keeping under the radar:
watch out for “Smurfs”
William Tupman
Department of Politics, University of Exeter, Exeter, UK
Abstract
Purpose – The purpose of this paper is to argue that small-scale, low-value but high-volume fraud
should be pursued as seriously as high-value, organised crime-related fraud.
Design/methodology/approach – The paper discusses the consequences of profiling offenders and
offences involving fraud against the European Community budget. It also looks at ten years of the
body tasked with investigating such fraud and suggests that it has become bogged down with too
many responsibilities and too few resources. It ends by describing the requirements for a successful
investigative environment.
Findings – The political nature of the fight against fraud means that measures based solely on
economic criteria are a mistake; measures against political and social harm need to be developed to
assist in prioritization.
Practical implications – Public education is required to change the image of those who commit
fraud against the Community budget. A different institutional set-up is also advisable.
Originality/value – The paper applies the lessons learned from targeting frequent offenders in the
UK who are being ignored because each individual offence is not worth pursuing but, once the offences
in total are recognised, much harm could be prevented.
Keywords Fraud, Crimes,European Union, United Kingdom
Paper type Research paper
Introduction
This paper continues a series on fraud against the European Community budget begun
in 1996. It discusses the profile of offenders and offences and suggests that low-level
volume offenders should not be neglected in favour of high-economic value “organized
crime”. Smurfing originated as a term to describe a technique of money laundering
where a sum to be laundered can be broken down into smaller sums to avoid the
threshold applied by banks for notification of suspicious activity. It has been
increasingly widely used to describe practices where several individuals share in a
criminal enterprise to avoid any one of them arousing the interest of investigators by
triggering an investigative threshold, be that financial or movement related.
It is nearly a decade since OLAF replaced UCLAF. The commission evaluated
OLAF’s work in 2003 and the European Parliament commissioned an evaluation of
OLAF’s work and the Court of Auditors produced a large report on OLAF’s work in
2005. Ten years ago, I argued that OLAF had a greater prospect of providing a model
for supranational investigation at European level than Europol did (Tupman, 1997,
1998a, b, 2000). The essence of the argument was that OLAF was already a
supranational institution responsible to a supervisory agency at arm’s length from the
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1359-0790.htm
JFC
17,1
152
Journal of Financial Crime
Vol. 17 No. 1, 2010
pp. 152-162
qEmerald Group Publishing Limited
1359-0790
DOI 10.1108/13590791011009428

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