NatWest failed to spot £264m bags of ‘laundered cash’
Bank now faces £340m fine over rule breaches
NATWEST has pleaded guilty to breaching anti-money laundering laws and faces a £340million fine for failing to raise red flags when one of its customers deposited £264 million in cash.
In an unprecedented case brought by the City watchdog, the state-backed lender admitted yesterday that it had failed to monitor or prevent suspicious activity from one of its clients, collapsed Bradford-based gold dealership Fowler Oldfield.
The business, which was shut down following a police raid in 2016, deposited about £365 million in its NatWest accounts over five years – of which £264million was in cash. Fowler Oldfield had predicted it would make only £15 million a year when it opened its NatWest accounts – and yet was funnelling up to £1 million of cash into them every day at its height.
NatWest admitted three charges of breaching anti-money laundering rules at Westminster Magistrates’ Court yesterday.
It will come as an embarrassment to NatWest boss Alison Rose, 51, who headed the lender’s commercial business for part of the time covered by the lawsuit, although it is understood she did not personally oversee anti-money laundering controls.
The guilty pleas followed a lengthy investigation by West Yorkshire Police, which blew apart a ring of suspected criminals.
Money laundering involves taking cash obtained from crime, and making it appear that it came from a legitimate source. Prosecutions related to the scandal have resulted in several defendants from the Merseyside area being sentenced in the past two years, including men who transported cash to Fowler Oldfield.
Their trials revealed how couriers were paid by the gold dealer to carry holdalls stuffed with cash to its premises on an inconspicuous industrial site.
They were among a procession of men who were summoned by text message and delivered up to £2million a day to the building. The bags were unpacked behind closed doors, and eventually the money would end up in Fowler Oldfield’s NatWest accounts.
A series of couriers were spotted on CCTV carrying the bags of cash to Fowler Oldfield’s reception after West Yorkshire Police and the National Crime Agency launched an investigation into the century-old jeweller.
When sentencing four of the delivery men, Judge Colin Burn noted that they had been targeted for recruitment because of their debts, often from gambling. One feared that if he had not delivered the money there would be consequences for himself and his family.
The case against NatWest marks the first time the City regulator, the Financial Conduct Authority (FCA), has launched a criminal prosecution under the 2007 money laundering regulations and the first time the rules have been used to prosecute a bank. They state that banks must do everything they can to spot and prevent the crime.
A lawyer for the FCA told the court the ‘likely sentence is a very large fine’.
The watchdog alleged that NatWest, formerly known as Royal Bank of Scotland (RBS) and now 55 per cent owned by the taxpayer following its bailout during the financial crisis, was responsible for £170 million of damage – which it said should be doubled due to the bank’s culpability.
A crown court judge will have the final say on the penalty when the case is referred for sentencing later this year.
A separate case against 13 individuals linked to the gold dealership, brought by the Crown Prosecution Service, is due to go to trial next year.
Miss Rose said yesterday: ‘We deeply regret that NatWest failed to adequately monitor and therefore prevent money laundering by one of our customers between 2012 and 2016.
‘NatWest has a vital part to play in detecting and preventing financial crime and we take extremely seriously our responsibility to prevent money laundering by third parties.’
‘Delivered up to £2million a day’