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Anti-Money Laundering & Financial Crime Prevention
Lesson 4: Recognising Red Flags
Transaction red flags, customer behaviour, and real enforcement case studies
Overview
Hidden Among the Legitimate
  • Billions of pounds flow through UK banking daily
  • Most are legitimate — but hidden among them are proceeds of serious crime
Case Study
The Stunt & Co Onboarding
  • In 2012, Stunt & Co opened accounts with Barclays
  • Onboarding gathered basic information — not nearly enough
Case Study
The Fowler Oldfield Connection
  • £46.8 million transferred in just over one year
  • Part of a £400 million laundering operation
  • Fowler Oldfield later convicted
Transaction Red Flags
Classic Warning Signs
  • Round figures with no commercial rationale
  • Volumes far exceeding reasonable expectation
  • Third-party payments from unconnected entities
Transaction Red Flags
Types of Suspicious Transactions
  • Unusually large amounts
  • Rapid cross-border transfers
  • Structuring — splitting deposits to dodge thresholds
37,000
UK mule accounts in 2023
£10bn
laundered annually
Behavioural Red Flags
Customer Behaviour Warning Signs
  • Reluctance to provide identification
  • Evasiveness about the source of funds
  • Pressure to rush onboarding
  • These are not personality quirks — they are warning signs
Case Study
The Police Raid
  • Police raided Fowler Oldfield
  • The connection to Stunt & Co was clear
  • Yet Barclays still did not act
Case Study
Five Years of Inaction
5 yrs
before a proper review
  • Five years of missed opportunities
Enforcement
The FCA Investigation
  • Breached duty of skill, care and diligence
  • Breached duty of management and control
Enforcement
The FCA's Penalty
£39.3M
FCA fine
“The consequences of poor financial crime controls are very real.”
— Therese Chambers, FCA
Enforcement
The WealthTek Case
  • Account opened without checking the Financial Services Register
  • £34 million deposited
£3.1M
fine
£6.3M
ex-gratia to clients
Enforcement
Combined Penalty
£42M
Two cases. One bank. The same failure.
Lessons Learned
How to Prevent This
  • Monitor continuously
  • Respond to events as they happen
  • Never dismiss basic checks
  • Escalate early — before a concern becomes a crisis
Your Role
Will You Recognise the Red Flag?
  • Every employee is a line of defence
  • The question is not whether you will encounter a red flag
  • It is whether you will recognise it when you do
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