NatWest was fined £264m after accepting deposits of money laundered in trash bags

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A court has heard that a Bradford-based jewelry company suspected of money laundering deposited £700,000 in cash in black box bags at a NatWest branch in a single day.

Main Street Bank, more than half of which is still owned by taxpayers, was fined more than £264m on Monday after it admitted allowing alleged illegal deposits to occur.

Fowler Oldfield, which specializes in trading gold bullion, has a projected annual turnover of £15 million annually.

But over a three-year period, the company was able to deposit £365 million, including £264 million in cash, with NatWest.

About 50 branches across the country were used to deposit, with £42 million paid at Southall NatWest between January 2015 and March 2016.

Southwark Crown Court heard how Walsall branch accepted in one day a deposit of £700,000 in cash brought into the building in black containers.

The money was too heavy for the sacks and had to be repacked in burlap sacks, but there was too much that they could not all be stored in the vaults.

The bank’s Halifax branch received £750,000 in three days, while its London branches Piccadilly and New Bond Street became concerned they were receiving more cash than they could handle.

Banknotes “mold” smell

At one center that handled cash, workers reported that the banknotes had a “musty” smell as if they were stored under the floorboards. But despite this, it has not been reported that the deposits may be suspicious.

In October, NatWest, part of the Royal Bank of Scotland group, pleaded guilty to three offenses under money laundering regulations.

At Southwark Crown Court on Monday, Mrs. Justice Cockrell fined the bank £264,772,620, ordered it to pay £4,297,466 in costs and issued a forfeiture order of £460,047.

This is the first time that a financial institution has faced criminal prosecution by the Financial Conduct Authority (FCA) under UK anti-money laundering laws.

The judge said: “Throughout the period of the indictment, NatWest has accepted that it has sought to fulfill its obligations under the Regulations and that it has failed to do so.

“No intentional breach of the rules or any criminal intent was indicated.”

“If the bank had not failed, the money would not have been laundered.”

The judge added: “Although in no way complicity in the money laundering that took place … had it not been for the bank’s failures, the money laundering would not have been possible.”

Fowler Oldfield was closed down following a police raid in 2016 and 15 people with business connections have been charged in connection with the alleged money laundering offences.

A number of other people also faced criminal charges after being accused of acting as couriers for transporting cash around the country.

Prosecutor Claire Montgomery QC said the company alleges it is in the business of buying scrap gold, which has been calibrated and sold to jewelers in ingots or grains.

She said there was a “rapid escalation in the amount of money on hand” as of November 2013, with figures reaching £1.8m a day, and by 2014, Fowler Oldfield was the “single most lucrative” client in the Bradford area.

The court heard that NatWest invested £700m to tackle financial crime, with another £1bn set aside over the next five years.

But Montgomery said there “remain concerns on behalf of the FCA,” with the completion date for one program pushed back from 2020 to 2023.

‘Deep regret’

Defending this, John Kelsey Fry said the bank “recognizes the seriousness of any failure to successfully meet” its obligations and expressed its “deep regret” on behalf of the board.

“It has not escaped the bank system and has not gone off the radar,” he said. It was identified and examined.

“The quality or adequacy of this audit is another matter.”

Alison Rose, CEO of NatWest, said: “NatWest takes its responsibility to prevent and detect financial crime very seriously.

“We deeply regret that we failed to adequately monitor one of our clients between 2012 and 2016 for the purpose of preventing money laundering.

“As today’s hearing concludes this case, we will continue to invest significant resources in the ongoing fight against financial crime.”

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