Scottish bank in $50m inquiry

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The Independent Online
THE BANK of England investigated the Royal Bank of Scotland after $50m (pounds 32m) passed through an account linked to a Russian mafioso without the bank checking whether it was being laundered.

A National Crime Intelligence Service report said the source of the money was Semion Mogilevich, the Ukrainian at the centre of allegations that $10bn was laundered through the Bank of New York.

In an attempt to launder his illegal gains, Mogilevich set up three accounts with an unsuspecting London law firm, Blakes. One of the firm's principals, Adrian Churchward, 53, from Romford, east London, was married to Mogilevich's ex-wife, who knew nothing of the mafia don's criminal activities.

Large sums of money started going through the hands of the London lawyers. This attracted the attention of police, who raided the homes of the lawyers in May 1995, and seized pounds 2m from their account at the Royal Bank of Scotland. No prosecutions followed.

Because the money was put in the Blakes' client account, none of the transactions came to the notice of the money laundering reporting officer of the Royal Bank. The bank's attitude was that it didn't need to check because the Law Society was responsible for regulating solicitors' firms in respect of money laundering, said the NCIS report. The bank was not aware that the money came from Mogilevich.