- NatWest admits it failed to monitor £365m of business client’s account deposits over three years
- Fowler Oldfield, a Bradford business linked to a firm run by James Stunt, ‘massive’ money laundering
- The jewelery wholesaler was reported to have an estimated turnover of £15m a year – but NatWest failed to detect the scam
- For the first time a financial institution has faced criminal prosecution under anti-money laundering laws in the UK
- Britain’s biggest commercial bank could potentially face a fine of around £340m if punished on 8 December
Taxpayer-backed NatWest is facing fines of up to £340 million after admitting it failed to find a Bradford gold dealer with links to businesses run by Petra Ecclestone’s ex-husband James Stunt. Which laundered £365 million over five years, despite the bank’s own prediction of swindling. The annual revenue of the business would be only £15 million.
Jewelry wholesaler Fowler Oldfield, 122, collected up to £1.8 million in a day at the height of the scandal as a procession of couriers dropped a bag full of cash at a dirty office in an industrial estate in West Yorkshire.
At the time of the police investigation into Fowler Oldfield, news reports linked the company to businesses run by Petra Ecclestone’s ex-husband, James Stunt. Its owner was Gregory Frankel, the great-grandson of its founder, vice president of Stunt & Company, a gold bullion business where Mr. Stunt was chairman.
The police would later raid the premises and later break the network behind the branded operation Money laundering ‘large scale’ – but Britain’s biggest trading and commercial bank failed to recognize it, even as deposits grew ‘increasingly large’.
The courier, called by Text, was paid each day by a gold and jewel dealer to carry holdalls filled with banknotes worth up to £2 million to his premises at an industrial estate. The cash would be unpacked inside the run-down office and later deposited into Fowler Oldfield’s NatWest account.
The High Street money lender is 55 percent taxpayer owned following a £45 billion state bailout during the financial crisis. Today NatWest acknowledged that in a criminal trial of its kind in the UK, the jeweler was allowed £365 million in loot, including £264 million in cash.
It could face a possible fine of around £340m under sentencing guidelines, but a judge will decide the final level of fine at Southwark Crown Court on 8 December.
The bank indicated pleas guilty to three offenses under the Money Laundering Regulation 2007 for not adequately monitoring customer accounts between 2012 and 2016 at Westminster Magistrates’ Court. This is the first criminal trial by the Financial Conduct Authority under the 2007 law.
NatWest chief executive Alison Rose later spoke of her “deep regret” over the scandal that tarnished the bank’s reputation and imposed heavy fines that would damage its own balance sheets.
Taxpayer-backed NatWest is facing a fine of up to £340 million today after admitting that it linked Bradford to businesses run by Petra Ecclestone’s ex-husband James Stunt (pictured together before their divorce). Failed to find Gold dealer.
Fowler was the vice president of Oldfield’s owner, Gregory Frankel, Stunt & Co., a gold bullion business where Mr. Stunt (pictured last year) was chairman.
Police raided the Bradford premises of gold dealer Fowler Oldfield in September 2016, where couriers would drop off bags filled with cash worth up to £2m a day.
Fowler Oldfield was destroyed after a police raid in 2016 and its assets were left in the hands of the police.
The prosecution has resulted in the sentencing of several defendants in the Merseyside area over the past two years, including men transporting cash.
Chief executive Alison Rose (pictured) said NatWest ‘deeply regrets’ its failure to stop money laundering by one of its customers between 2012 and 2016
Prosecutors said that according to a local newspaper report, a courier would be called by text message and did not know how much was in each bag at Fowler Oldfield.
Today’s action against NatWest marks the first time a financial institution is being criminally prosecuted under anti-money laundering laws in the UK.
NatWest could now be fined up to £240 million.
FCA prosecutor Claire Montgomery QC told Westminster Magistrates that when Fowler Oldfield was taken on as a client by NatWest, it had an estimated turnover of around £15 million a year.
However, it accumulated £365million over a span of about five years, of which £264million was in cash.
Mrs Montgomery said: ‘Fowler Oldfield’s turnover was predicted to be £15m per year.
It was agreed that the bank would not be able to handle cash deposits.
‘However, it accumulated £365million with approximately £264 million in cash.’
That said, at his height, Fowler Oldfield amassed up to £1.8million a day.
Fowler Oldfield was given up to £2 million in cash every day as part of a ‘highly sophisticated’ money laundering scheme, a 2019 court case – reported in The Financial Times – revealed.
In a final statement by the liquidator for Fowler Oldfield – dated December 2020 and filed at Company House – they said NatWest was the secured creditor and that police had held the company’s confiscated assets.
Today NatWest Chief Executive Alison Rose said: ‘We are deeply sorry that NatWest failed to adequately monitor and therefore prevent money laundering by one of our customers between 2012 and 2016.
‘NatWest has an important role in detecting and preventing financial crime and we take our responsibility to prevent third party money laundering very seriously.
‘In the years since this case, we have invested significant resources and continued to increase our efforts to effectively combat financial crime.
‘We work tirelessly with partners, other banks, industry bodies, law enforcement, regulators and governments to help find collaborative solutions to this shared challenge. These partnerships are critical to combating the significant and emerging threat of financial crime to society.
NatWest is facing a fine of up to £240million after admitting it failed to properly monitor £365million in Fowler Oldfield Limited accounts
NatWest pleaded guilty to three offenses under the Money Laundering Regulations 2007. It will be sentenced on or before 8 December at Southwark Crown Court.
According to laws passed in 2007, financial firms must do everything possible to prevent their services from becoming a weapon of criminals.
The case against NatWest is the first criminal trial under those rules since 2007.
When handling funds from Fowler Oldfield, the FCA alleged that NatWest failed to properly investigate ‘increasingly large cash deposits’.
Prosecutors said couriers would hand over cash to Fowler’s reception at Oldfield and usually an envelope containing a token as proof of delivery. The men were paid to transport the money.
The bags were unpacked in a counting room behind closed doors at Fowler Oldfield and the amount of each courier was recorded in a ledger.
But it was the bookkeeping and CCTV footage that later helped investigators identify the couriers when the Economic Offenses Unit of West Yorkshire Police raided the site in 2016.
The police were backed by the National Crime Agency, often called Britain’s answer to the FBI, which arrested 12 people for money laundering crimes.
Crown Court Judge Colin Byrne noted when sentencing the four couriers that they were targeted for recruitment because of their debt, often from gambling. One man feared that there would be consequences for him and his family if he did not give the money.
A source familiar with the investigation said one notable aspect was the simple methods employed.
“Money laundering can be complicated these days,” the source said, adding that the guilty were doing it the “old-fashioned way”.
NatWest previously said it cooperated with the criminal investigation and took its anti-money laundering responsibilities “very seriously.”