UK-based retail bank, National Westminster Bank (NatWest), has been fined over £264 million ($349 million) for its anti-money-laundering failures, wherein the bank accepted black dustbin bags stuffed with cash as deposits from Bradford-based jewelry store Fowler Oldfield.
It has been reported that some of these deposits had such large sums that even two floor-to-ceiling safes in one of the bank’s branches proved inadequate when it came to storing the money.
NatWest, part of the NatWest Group, had pleaded guilty to three offenses for failing to comply with the anti-money-laundering regulations in October. This is regarding its failure to effectively monitor the jeweler’s activities between 8th of November 2012 and 23rd of June 2016.
As per the bank, the jeweler’s predicted annual turnover had been £15 million (~$20 million) when it was first accepted as a client, but over a five-year period, it made deposits totaling £365 million ($483 million), out of which £264 million ($349 million) had been in cash.
During that time, the UK’s National Crime Agency, requested information regarding the customer, claiming that it involved a lot of banknotes from Scotland being deposited. As per court documents, the law enforcement believed that the discovery of vast amounts of Scottish banknotes within England meant that the money might be related to criminal activities.
Fowler Oldfield, which was closed down in 2016 following a police raid, was marked as ‘high risk’ when NatWest first took it on as a client in 2011 but was subsequently downgraded in late 2013.
The bank has been fined over £264,772,620 (approximately $350 million) by Mrs. Justice Cockerill at the Southwark crown court. It has now become the first financial institution to face criminal prosecution under UK’s anti-money-laundering laws by the Financial Conduct Authority (FCA).
Around 50 branches across the UK were used in making those deposits, but no reports were received over the suspicion of such large deposits, even when one branch had received £42 million ($55 million) in cash.
Barrister John Kelsey-Fry QC, defending NatWest, stated that the case did not escape the bank’s system, claiming that it was identified and subjected to scrutiny. Kelsey-Fry added that that the actual adequacy and quality of that scrutiny is up for discussion.