LONDON (BLOOMBERG) - Formula One mogul Bernie Ecclestone put up millions of dollars to support a series of gold transactions that made "no commercial sense", prosecutors said at a trial into one of Britain's biggest money laundering operations.
Mr Ecclestone provided a US$10 million (S$13.8 million) personal guarantee for a gold deal for his then son-in-law James Stunt, prosecutors said, as they laid out an elaborate chain of transactions aimed at hiding the origin of bags of street cash.
In total, some £266 million (S$456 million) was banked by NatWest Group and then laundered, prosecutors allege.
Mr Ecclestone is not a defendant in the case and has not been accused of wrongdoing. Stunt is one of eight people standing trial over allegations of laundering cash from criminal activity.
Only a few branded bars were ever made, and no Formula One gold coins were ever minted, Mr Nicholas Clarke, the lead prosecution lawyer, said.
"The involvement in these businesses made no commercial sense at all and appear to be vanity projects (for Stunt)," he said.
The financing arrangement, provided by Canada's Bank of Nova Scotia, was intended to help pay for branded gold bars and coins. Instead, the money was used to acquire gold that would be melted and broken up and destined for Dubai, said Mr Clarke. The Canadian bank is not alleged to have done any wrongdoing.
Scotiabank also delivered around 50 million pounds of gold - some 1,700kg - to Stunt's firm. Stunt, who was previously married to Ecclestone's daughter Petra, says he did not know the cash was criminal and has denied any misconduct. He told the authorities that if he had had the "slightest suspicion that anything illegal" was taking place, then he would have walked away, Mr Clarke said.
But the prosecutor said Stunt was not as wealthy as he claimed he was. "His own personal finances are shrouded in mystery," Mr Clarke said.
Much of the gold, purchased with Scotiabank's financing, was cut up and melted down into "wholly anonymous" grains and shipped to Dubai rather than being used to produce the branded gold bars, Mr Clarke said.
The money was sent overseas "in order that in due course it could be returned to the crooks from where it came", Mr Clarke said.
Bank of Nova Scotia later called in the loan, requiring Mr Ecclestone to repay the full US$10 million, he said.
Jurors previously heard that directors at the English gold dealer tried to hide that they were processing huge amounts of cash from Bank of Nova Scotia.
"Don't talk about cash," one director had said, as a group of officials from the bank visited gold dealer Fowler Oldfield on a due-diligence trip.