Bank fined £265m after money laundering investigation into Bradford gold dealer
NatWest has been fined £264.8m following convictions for three offences of failing to comply with money laundering regulations.
The fines comes after the bank pleaded guilty earlier this year to failing to prevent money laundering of almost £400m by a Bradford business.
Mrs Justice Cockerill, the sentencing judge at Southwark Crown Court said: “It must be borne in mind that although in no way complicit in the money laundering which took place, the Bank was functionally vital. Without the Bank – and without the Bank’s failures – the money could not be effectively laundered.’
The fine which included a 33% discount because the bank pleaded guilty early, will be met from existing provisions although the bank noted that a small additional provision is to be taken its Q4 2021 financial accounts.
The sentencing brings an end the first case which has seen the Financial Conduct Authority pursue criminal charges for money laundering failings.
The investigation found that NatWest had failed to properly monitor the company accounts of gold and precious metal dealer Fowler Oldfield, that received cash deposits totalling £264m – despite an agreement that the bank would not handle cash deposits.
When Bradford-based business became a client of NatWest, the business was predicted to turnover £15m per year, however it actually deposited £365m between November 2011 and October 2016, reportedly depositing £1.8m a day at its height including £700,000 was deposited in branch in black bin bags.
A separate investigation by West Yorkshire Police into Fowler Oldfield has seen 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 25 April 2022 in relation to the activities of the gold and precious metal dealer.
NatWest CEO, Aliso Rose said: “NatWest takes its responsibility to prevent and detect financial crime extremely seriously. We deeply regret that we failed to adequately monitor one of our customers between 2012 and 2016 for the purpose of preventing money laundering. While today’s hearing brings an end to this case, we will continue to invest significant resources in the ongoing fight against financial crime.”
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.”