What is 'smurfing' in the framework of money laundering?

Smurfing refers to the technique of breaking large amounts of illicit money into smaller, more manageable sums. This is done to avoid detection by authorities, as large transactions can raise red flags and attract scrutiny from financial institutions and regulators. By breaking the funds into smaller amounts, individuals can conduct numerous transactions that appear less suspicious and are less likely to trigger reporting requirements or investigations. This method helps launder money by obscuring its origins and making it easier to integrate into the financial system without attracting attention.

The other options do not accurately capture the essence of smurfing. While hiding the source of illicit funds is a broader concept related to money laundering, smurfing specifically pertains to the fragmentation of amounts, which makes option B the most precise in this context. Legal investments and tax evasion do not align with the primary focus of smurfing as they address different aspects of financial activities unrelated to the methodical approach of laundering money.