Man Sentenced for ‘Smurfing’

Man Sentenced for ‘Smurfing’

Structured cash deposits were intended to avoid federal scrutiny.

Jean Nicolas Lataillade, 45, of Alexandria has been sentenced to 24 months in prison and fined $20,000 in a money-laundering case involving clandestine cash payments and structured deposits intended to avoid federal scrutiny. Federal prosecutors claim that in May 2004, Lataillade made a series of cash deposits below $10,000 in an effort to prevent his financial institution from filing reports with the Internal Revenue Service — a tactic referred to by prosecutors as "smurfing."

"Cash makes people suspicious," said William Lash, a professor of law at George Mason University. "And trying to structure deposits in order to avoid reporting requirements raises all kinds of red flags with financial institutions."

Prosecutors say that Lataillade received several clandestine cash payments made to him while employed as a sales executive for Teleglobe Communications Corporation, an international telecommunications company that was based out of Reston. According to a press release posted on its Web site, VSNL — an Indian-based telecommunications company — announced its acquisition of Teleglobe last week.

Lataillade admitted to structuring 31 cash deposits totaling $255,990 to accounts at Bank of America and Kinecta Federal Credit Union. These deposits were made in individual amounts below $10,000 in an effort to prevent currency transaction reports from being filed with the IRS. In a December plea agreement, Lataillade forfeited $59,400 and filed amended income tax returns to report an additional $255,990.

The plea and sentencing were the result of a newly formed Northern Virginia task force that is scrutinizing unlicensed money transmitting businesses and unusual banking activities.