a £264 million fine for depositing laundered cash into rubbish bags at NatWest

a £264 million fine for depositing laundered cash into rubbish bags at NatWest

NatWest was fined over £264 million for anti-money laundering violations involving cash in black trash liners dumped in Walsall.

Between November 8, 2012, and June 23, 2016, the bank, which is part of the Royal Bank of Scotland group, pleaded guilty to three money laundering charges.

Over a five-year period, Fowler Oldfield deposited £365 million with the bank, including £264 million in cash, some of it in garbage bags.

Mrs Justice Cockerill penalised the bank £264,772,620, ordered it to pay £4,297,466 in costs, and confiscated £460,047.

Between January 2015 and March 2016, Southall received £42 million in cash from around 50 branches around the UK, but nothing was reported as unusual.

The court heard that £700,000 was deposited into the Walsall branch in a single day, in garbage bags.
Cash in black bin liners was seen going around the streets, said prosecutor Clare Montgomery.

The cash was too heavy for the bags and had to be repackaged in hessian sacks, she said, but there was too much for the bank's safes.

"Throughout the indictment period, NatWest endeavoured to discharge its obligations under the regulations, but failed," the judge said.

"There is no evidence of willful disregard for the law or criminal intent."

The Financial Conduct Authority (FCA) has prosecuted a financial institution for the first time under UK anti-money laundering regulations.

“While not participating in the money laundering that occurred, the bank's failures allowed the money to be laundered,” the court added.

To date, NatWest has placed a total of £365 million into Fowler Oldfield, including £264 million in cash.

The company was initially classified as “high risk” but was reduced in December 2013.

Prosecutor Clare Montgomery QC said the organisation pretended to buy scrap gold and sell it to jewellers in bars or grain.

According to her, deposits increased rapidly from November 2013, reaching up to £1.8 million per day by 2014, and Fowler Oldfield was the “single most lucrative” client in the Bradford region.
The Halifax branch of NatWest received £750,000 in three days, while Piccadilly and New Bond Street, with "several millions" in deposits, were concerned.

Concerns were expressed at a cash centre over Scottish notes that smelled "musty" as if "stored under the floorboards."

The rise in cash deposits was attributed to "macroeconomic considerations," according to the financial crime manager of another cash centre.

Between 2008 and March 2017, NatWest's automated monitoring system detected about £165 million in payments from Fowler Oldfield as direct cash deposits.

Internal money laundering reports and automatic transaction monitoring warnings cited the firm 11 times.

A SAR was also filed against one of Fowler Oldfield's clients, a hair extension company that received £307,000 from the jewellers.

“None of those complaints resulted in a SAR being filed,” Ms Montgomery added.

She added Borehamwood personnel were more interested with closing the reports in 30 days than adequately investigating.

To combat financial crime, NatWest has pledged £700 million over the next five years.

One program's completion date has been moved back from 2020 to 2023, according to Ms Montgomery.

The bank "understands the seriousness of any failure to successfully discharge" its duties, said the bank's lawyer, John Kelsey-Fry QC.

"It didn't slip through the bank's system," he claimed.

"It was identified and investigated."

"How thorough that scrutiny is is another issue."

"NatWest takes its responsibility to prevent and identify financial fraud extremely seriously," stated NatWest CEO Alison Rose.

"We apologise not effectively monitoring one of our customers between 2012 and 2016 to avoid money laundering.

We will continue to devote enormous resources in the ongoing fight against financial crime, despite today's hearing.