- NatWest Group, a major UK commercial and retail bank, was fined the equivalent of R5.6 billion for pleading guilty of failing to prevent money laundering.
- Hundreds of thousands of pounds were sent by courier in black garbage bags, and the branch safes were overflowing with banknotes.
- A cash processing center manager warned a financial crime investigator that the volume of deposits is the most suspicious he has seen in his entire career.
NatWest Group was fined £ 264.7 million (Rs.5.6 billion) in a verdict after pleading guilty of failing to prevent money laundering in a case that left hundreds of thousands of pounds in black garbage bags and bank vaults were crowded with notes.
The bank admitted three criminal charges in October and admitted it had failed to prevent money laundering at an English gold dealer. NatWest took around £ 365 million in deposits in around 50 branches, of which more than two-thirds were in cash.
Supplies piled up despite the gold dealer forecasting annual sales of just £ 15 million a year.
The case was followed up by the UK’s Financial Conduct Authority, which identified a number of failures in local offices as well as repeated failures in general reporting and oversight. A cash processing center manager warned a financial crime investigator that the volume of deposits is the most suspicious he has seen in his entire career.
NatWest continued to take money until the police finally took over the account in 2016.
“Without the bank – and without the bank’s failures – the money could not be laundered effectively,” said Judge Sara Cockerill.
It imposed a fine 15% higher than the £ 340 million originally requested by the FCA – partly as a deterrent – but reduced the grand total by a third due to the bank’s admission of guilt.
NatWest chief executive officers Alison Rose and chairman Howard Davies sent the judge a letter apologizing for the bank’s actions.
The gold dealer was shut down after a police investigation in 2016 for an allegedly “extremely sophisticated” money laundering operation.
When the account was opened, the bank had promised not to make any cash deposits. But at the height of activity, the dealer deposited up to £ 1.8 million a day at the local branch, said Clare Montgomery, attorney for the FCA.
Black trash bags
The account is the “most lucrative” single account for the corporate banking office in the Bradford area of northern England, Montgomery told the judge. In one branch around 700,000 pounds of cash were loaded into black garbage bags and walked through a shopping center. The notes were so heavy that the pockets almost burst, she said.
The safes were so full that some money bags had to be stored outside, she said.
John Kelsey-Fry, a NatWest attorney, said the bank staff did not miss the suspicious activity.
“It didn’t go under the radar. It has been identified and tested, ”said Kelsey-Fry. “The quality and appropriateness of this exam is a different matter.”
On another occasion, bank employees at a cash processing center discovered a large amount of Scottish banknotes that police suspected might have been trafficked from drugs. NatWest refused to provide any further information when the police requested it.
The case marks the FCA’s first prosecution under the 2007 Money Laundering Regulations and a bank’s first prosecution, part of a concerted effort by the regulator to act more forcefully.
“Whatever happens, the bank has to bear the stigma,” Kelsey-Fry said.