Bank boss jailed for £21m loans scam

Bank boss jailed for £21m loans scam

A former Royal Bank of Scotland business manager has been jailed for 10 years after using loopholes in a loan approval system to defraud the bank out of £21 million.

Donald Mackenzie, 45, who pleaded guilty to the crime earlier this month, carried out the fraud while working as business manager at a branch of the bank in Edinburgh where he was named 'Manager of the Year' for three consecutive years from 2002.

The high court in the city heard how Mackenzie accessed the money through the bank's loan system by setting up around 70 false accounts using bogus names. He then spent five years trying to cover his tracks by moving the money around using tens of thousands of transactions.

The crimes started back in 1999 but were not detected and reported to the police until 2004.

According to press reports, Mackenzie was caught after the RBS introduced a new 'loan guard' computer system which inadvertenly crashed whenever customer data was amended during the loan process.

In March 2004 the bug that caused the system to crash was uncovered by the bank's IT department, who also stumbled upon the suspect data that had been entered into the system by MacKenzie.

The team also traced a series of "highly suspicious" transactions. In one, £750,000 was deducted using a credit line initially earmarked for the sum of £7,500.

According to reports, around £10m of the £21m defrauded still has not been recovered, despite Mackenzie helping police to try to track the money.

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