A gold trading company was accused of money laundering. It deposited PS700,000.00 in cash in a NatWest branch, according to a Monday hearing.
According to prosecutors, the UK’s financial watchdog found that a criminal gang had deposited large sums of money in about 50 branches.
NatWest expressed deep regret at not being able to properly monitor the customer.
This is the first time that a UK financial institution has been subject to criminal prosecution under the Financial Conduct Authority’s Anti-Money Laundering laws.
Although the fine could have been higher, it was reduced by the fact that the bank had pleaded guilty to the charges at the sentencing hearing.
NatWest, which is part of Royal Bank of Scotland, pleaded guilty in October to three offences under UK money laundering regulations.
Alison Rose, chief executive of NatWest Bank, stated that the bank takes financial crime prevention and detection very seriously.
“We are deeply sorry that we did not adequately monitor one of the customers between 2012-2016 in order to prevent money-laundering.”
She said that although the case was over, the bank would continue investing in fighting financial crime.
Reporting is not done
Fowler Oldfield, a Bradford jeweller, had a predicted annual turnover of PS15m when it was taken on by NatWest as a client. It deposited approximately PS365m over five-years, with PS264m cash and PS264m in deposits.
After a raid by police in 2016, the company was closed. It was originally marked “high-risk”, but this was revised in December 2013.
Clare Montgomery, the lawyer for the FCA, stated that there was a rapid increase in cash deposits since November 2013. These figures reached up to PS1.8m per day. Fowler Oldfield was NatWest’s “single most profitable” client in Bradford by 2014.
Southall was able to receive approximately PS42m in cash from January 2015 to March 2016, but there was no suspicion.
This is despite lawyers stating Monday that a Walsall resident arrived at the branch with so many cash in bin-liners that they were unable to fit the cash in the floor-to-ceiling safes.
The FCA lawyer stated earlier Monday that NatWest didn’t properly investigate numerous warnings it received from its systems.
The bank disabled one rule to flag suspicious activity because it generated too many alerts. Ms Montgomery said that NatWest also recorded cash deposits made by Fowler Oldfield and cheques issued by NatWest between 2008-March 2017.
The National Crime Agency raised concerns about the high number Scottish banknotes deposited in England at one time, according to the court.
A NatWest cash center in north-eastern England raised questions about Scottish banknotes. They had a “musty odor”, which suggests they may have been stored and not in normal circulation.
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According to Southwark Crown Court’s Monday ruling, the state-backed bank was not complicit in the money laundering that took place.
They added that the money couldn’t have been laundered without the bank’s failures.
Sidley partner Sara George told the BBC that there were clearly failings at all levels.
“It’s difficult to imagine a clearer indicator of criminal proceeds than black money bin-liners. She said it was extraordinary.
She said that the “landmark case” showed that the UK’s financial watchdog was committed to “using a fuller spread its enforcement powers to stop money laundering, which she called “anything but an innocent crime”.
