What is "smurfing" in the context of money laundering?

In the context of money laundering, "smurfing" refers to the practice of breaking large transactions into smaller, less suspicious amounts. This technique is employed to evade detection by financial institutions and regulatory bodies. By fragmenting larger sums into smaller transactions, the launderer can avoid triggering any reporting requirements or alerts that may be raised if a significant amount of money were moved at once.

This approach makes it more challenging for authorities to track and identify the sources of the funds, as smaller amounts are generally less scrutinized. Smurfing often involves multiple individuals or accounts, with each transaction appearing innocuous on its own, thereby masking the overall illicit activity.

In contrast, the other options address practices that do not specifically align with the smurfing strategy. For example, using fake identities relates to identity fraud rather than the specific tactic of breaking down transactions. Investing in high-risk securities may involve legitimate investment strategies that do not necessarily pertain to the initial step of laundering money. Transferring funds only within one jurisdiction does not encompass the broader movement and structuring of funds that smurfing entails, which often involves cross-border transactions as well.