Credit, collections & insolvency news
NatWest has been fined £264,772,619.95 following convictions for three offences of failing to comply with money laundering regulations.
It was found that the bank failed to properly monitor the activities of jeweller Fowler Oldfield between November 2012 and June 2016. The Bradford-based jeweller deposited £365 million with the bank over a five-year period, including £264 million in cash, despite having a predicted annual turnover of just £15 million when first taken on as a client. The deposits included an incident where £700,000 in cash was paid into a branch in bin bags.
Some of the bank’s employees, who were responsible for handling these cash deposits, reported their suspicions to bank staff responsible for investigating suspected money laundering, however, no appropriate action was ever taken. The ‘red flags’ that were reported included significant amounts of Scottish bank notes deposited throughout England, deposits of notes carrying a prominent musty smell, and individuals acting suspiciously when depositing cash in NatWest branches. In addition, the bank’s automated transaction monitoring system incorrectly recognised some cash deposits as cheque deposits. As cheques carry a lower money laundering risk than cash, this was a significant gap in the bank’s monitoring of a large number of customers depositing cash, of which Fowler Oldfield was one.
A separate investigation by West Yorkshire Police has led to 11 people pleading guilty to charges relating to the cash deposits and three cash couriers being charged. A further 13 individuals are awaiting trial at Leeds Crown Court on 25th April 2022 in relation to the activities of Fowler Oldfield.
NatWest, which pleaded guilty to three offences of failing to comply with anti-money-laundering regulations in October, was yesterday fined £264,772,620. Mrs Justice Cockerill at Southwark crown court ordered the bank to pay £4,297,466 in costs, and made a £460,047 confiscation order. It is the first time a financial institution has faced criminal prosecution by the Financial Conduct Authority under anti-money-laundering laws in the UK.
Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, said “NatWest is responsible for a catalogue of failures in the way it monitored and scrutinised transactions that were self-evidently suspicious. Combined with serious systems failures, like the treatment of cash deposits as cheques, these failures created an open door for money laundering.”
“Anti-money laundering controls are a vital part of the fight against serious crime, like drug trafficking, and such failures are intolerable ones that let down the whole community, which, in this case, justified the FCA’s first criminal prosecution under the Money Laundering Regulations.”
NatWest CEO Alison Rose said “We deeply regret that we failed to adequately monitor one of our customers between 2012 and 2016 for the purpose of preventing money laundering.” She added that while the hearing brings an end to the case, NatWest “will continue to invest significant resources in the ongoing fight against financial crime.”