NatWest used by launderers

Click to follow
The Independent Online
NATIONAL Westminster Bank was unwittingly used by money launderers to perpetrate a million dollar fraud, according to an investigation by the US Internal Revenue Service.

The investigation showed growing evidence that the City is becoming a favoured place for criminals to launder illegally gotten gains, despite a tightening of the rules.

The IRS said a London account at NatWest was used as a conduit for $29m (pounds 19m) over 10 months, although only $1m has been definitely linked to the scam so far.

Jim Robinson, the assistant US attorney handling the case, said Scotland Yard had been informed and that investigators believe money from other frauds passed through the account. NatWest, which was unaware the money was linked to crime, declined to comment on customer accounts.

Critics of the City say the discovery illustrates how London's popularity as an international money-laundering location is growing because of its lax methods for catching crooks.

Most of the money from an epidemic of Nigerian investment frauds passes through the Square Mile, according to the American Secret Service, which has set up a special task force to crack down on the scams. Victims are persuaded by bogus banking references and fake letterheads that Nigerian government agencies want to move millions of dollars left over from official contracts out of the country. The targets are prom- ised a large percentage if they agree to stash some of it in their accounts. The sting is that they must pay fees up front to secure the deal. The Nigerian money, of course, never arrives.

In the most recent case, a German computer company wired $500,000 directly to NatWest and another $330,000 to an Oklahoma City bank account in the name of Peter Philips, from which $105,000 was forwarded to the NatWest account on the instructions of Nigerian con artists operating out of a low-rent New York office.

Moving the money to London added credibility and formed the first step in obscuring the money's trail. "The account was very important in adding an additional layer of transactions," said IRS special agent Duane Shriver.

But it was the small Oklahoma bank, rather than sophisticated NatWest, that became suspicious of the deal and alerted the authorities.

q Richard Watson is a reporter for BBC's The Money Programme.

Comments