NatWest has admitted three counts of failing to properly monitor £365m deposited into a customer’s account.
It is the first time a financial institution has faced criminal prosecution under anti-money laundering laws in the UK.
The Financial Conduct Authority (FCA) said NatWest failed to adhere to the requirements of anti-money laundering legislation in relation to Fowler Oldfield Ltd’s account between November 7 2013 and June 23 2016.
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Fowler Oldfield was a century-old jeweller based in Bradford. It was shut down following a police raid in 2016.
NatWest now faces a fine of up to £340m.
FCA prosecutor Clare Montgomery QC told Westminster magistrates that when Fowler Oldfield was taken on as a client by NatWest, its predicted turnover was said to be £15m per annum.
However, it deposited £365m over the space of almost five years.
She said: “The turnover of Fowler Oldfield was predicted to be £15m per annum.
“It was agreed that the bank would not handle cash deposits.
“However, it deposited £365m, with around £264m in cash.”
She said that at its height, Fowler Oldfield deposited up to £1.8 million a day.
NatWest chief executive Alison Rose said: “We deeply regret that NatWest failed to adequately monitor and therefore prevent money laundering by one of our customers between 2012 and 2016.
“NatWest has a vital part to play in detecting and preventing financial crime and we take extremely seriously our responsibility to prevent money laundering by third parties.
“In the years since this case, we have invested significant resources and continue to enhance our efforts to effectively combat financial crime.
“We work tirelessly with colleagues, other banks, industry bodies, law enforcement, regulators and governments to help find collaborative solutions to this shared challenge. These partnerships are crucial to counter the significant and evolving threat of financial crime to society.”
NatWest admitted three offences under the Money Laundering Regulations 2007.
On the potential fine facing NatWest, Ms Montgomery said: “The appropriate harm figure is going to be around £170 million, with a multiplier of 200 per cent.”
Chief magistrate Paul Goldspring said the figures involved were too large to be dealt with by the magistrate court, and sentencing will take place at Southwark Crown Court on or before December 8.
