In the Media

High street banks riddled with criminal workers

PUBLISHED September 4, 2006

Disturbing details of how criminal gangs are infiltrating High Street banks and pilfering accounts can be revealed by the Daily Mail today.

Detectives believe tens of millions of pounds are being stolen by underworld groups who target corrupt bank employees.

In most cases, the gangs recruit existing bank workers who have financial or lifestyle problems which make them more likely to turn to crime. But it is thought that in some instances, existing gang members are landing jobs in banks - with a view to carrying out long-term fraud.

The extent of the problem emerged after a bank account manager was jailed for two years and three months for acting as a "gateway" and pilfering hundreds of thousands of pounds from Lloyds TSB.

Seevaratham Sivathasan, 32, opened 33 bank accounts in different names and paid thousands into them under the guise of setting up loan arrangements.

The accounts are all thought to be bogus and the customers and their addresses have never been traced. The cash has also disappeared without any being recouped.

Although Croydon Crown Court in south London was told (on Friday Sept 1) that ?129,500 in loans had been paid into the accounts as a result of his scam police believe the figure is a much higher ?450,000.

In addition Sivathasan, who was earning ?17,000 a year, transferred ?21,010 from the accounts into his own bank account as well as his wife's and one held in his baby daughter's name. His dishonesty was uncovered by detectives from City of London Police who have spent nearly three years investigating large scale fraud in High Street banks.

Operation Horizon was launched in January 2004 after the Royal Bank of Scotland alerted police to concerns about one its employees, who had opened a number of suspicious accounts.

Inquiries revealed evidence of large scale corruption involving 'bank insiders' at a number of High Street banks including Barclays, Lloyds TSB and the HSBC.

So far 16 people have been convicted of charges including conspiracy to defraud and obtaining a pecuniary advantage by deception.

Another two people arrested and charged as a result of the inquiry are awaiting trial. Officially the total cost of the losses uncovered by detectives is ?3.5million, but the true figure is believed to run into tens of millions.

City of London Police said: 'Sivathasan is one person arrested as part of an ongoing police operation into corrupt bank staff and criminal gangs who have opened and controlled fraudulently opened bank accounts.

'This enquiry has currently resulted in excess 30 arrests and 30 search warrants.'

Those detained include Omar Khan, age 30 and ex-employee of Lloyds TSB, from Pinner, Middlesex, who earlier this year was sentenced to two years in prison after admitting conspiracy to defraud his employers out of ?280,000.

Detective Sergeant Martin Peters, who has led the probe, said, ?Lloyds TSB, has been integral to the success of this investigation and the City of London Police will continue to take a robust stance in dealing with corrupt bank staff.'

When he was arrested, Sivathasan claimed the corrupt payments he received had been gifts from customers who were grateful to him for setting up loan agreements when they had been previously refused for credit.

The court was told the method he used to transfer funds was "unsophisticated." He used his own bank teller ID to sign on and left an easily-traceable computer trail of the cash transfers.

His lawyer Sam Brown claimed he was a "small cog in a much larger machine of dishonesty." But recorder Alan Gore QC said: "You were the gateway. Without you as the facilitator these offences could not have taken place.' The court heard Sivathasan first arrived in the UK from Sri Lanka in 1989 and attended British schools.

He started working for Lloyds TSB in September 1999 and by late 2001, had been promoted to the role of personal account manager in first Wandsworth and then Putney branch, where he helped customers open accounts.

But by January 2003, he had embarked on a fraudulent spree of pilfering money from the suspected bogus accounts into his own in 35 "corrupt payments".

His criminal activity was detected in October 2003, when he was arrested and initially denied the allegations.

Because police repeatedly tried to trace the missing money and customers - without success - he was not charged until earlier this year, when he pleaded not guilty.

Sivathasan changed his plea in July to admit 18 specimen counts of corruption.

He was ordered to serve two years and three months on the charges concurrently. A confiscation hearing is set to take place in December to strip him of his assets.