The fortune was routed through Royal Trust Bank in Douglas, Isle of Man, and into the property and leisure group Brent Walker as 'sham' income.
The court heard that on 23 December 1987, pounds 7m left a Brent Walker bank account in London, was received in the Isle of Man and transferred through three company accounts 'in-house'. The same day it was returned to Brent Walker in a series of payments.
Next month pounds 4m was received by one of the companies, Alberta, from a Tunisian bank and again moved to Brent Walker. The Alberta account with Royal Trust was only opened on the day it was involved with the first of the transfers.
William Cowie, former managing director of the bank, said he was aware that the three companies involved - Alberta, Universal Talent Management and Bullrush - held accounts linked to 'trusted and valuable customers' - John Quested and his representative Donald Anderson, both involved in making films.
The prosecution alleges both men were directors of Brent Walker's film division, at the heart of a fraud masterminded by Mr Walker.
Because of the size of the transactions, Mr Cowie requested written instructions from Alberta, which named Mr Walker as one of its authorised signatories.
Colin Nicholls, QC, defending Mr Walker, said a letter from Alberta on the first deal bore a signature which 'was not in fact his'.
He said the Crown accepted Mr Walker had not signed the letter confirming instructions on the second deal. 'I put it in stronger terms: it has been forged.'
Mr Cowie replied: 'That is the implication.' But he denied it was something the bank should have detected.
Mr Cowie said he had asked Mr Anderson the background to the pounds 7m transfers. 'He explained it was a film project and there was some tax avoidance or some tax breaks.'
Mr Nicholls said: 'Effectively money was being laundered.' Mr Cowie replied: 'With hindsight it appears it might be the case.'
He agreed his bank should have been on the alert for such tactics, but added: 'We were dealing with established customers of many years . . . why should we think it was money laundering?'
He agreed Mr Quested and Mr Anderson were connected with all three bank accounts. 'With the benefit of hindsight one would have asked a lot more questions.'Reuse content