Ex-bank boss jailed for 10 years

Donald Mackenzie had been named Manager of the Year three times

A bank manager who admitted carrying out one of Scotland's biggest frauds has been jailed for 10 years.

Donald Mackenzie, 45, pleaded guilty at the High Court in Edinburgh earlier this month to embezzling £21m from The Royal Bank of Scotland.

He accessed the money through the bank's loan system by setting up false accounts in the names of fictitious customers at a branch in Edinburgh.

Judge Lord Kinclaven said the court had a duty to mark the scale of dishonesty.

Mackenzie also pleaded guilty to stealing £37,170 between 15 May 2000 and 14 April 2004 while employed by the bank.

According to investigators, he spent about five years covering his tracks by moving money around using "tens of thousands" of transactions.

Passing sentence at the High Court in Edinburgh, Lord Kinclaven said: "Dishonesty on this scale is a serious matter and in the public interest the court requires to mark the gravity of these offences and its disapproval."

Mackenzie had been employed as a business manager at a branch in Princes Street, Edinburgh, and was named Manager of the Year for three consecutive years from 2002.

A team of 16 officers from Lothian and Borders Police sifted through the thousands of transactions.

It is thought about £10m of the money involved has still to be recovered.

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Advocate depute Alex Prentice said Mackenzie was caught after the RBS introduced a new "loan guard" computer system.

A problem was identified that the system would crash if customer information was amended during the loan process.

Bank officials traced a series of "highly suspicious" transactions, including one involving £750,000 taken from a loan account which was originally for £7,500.

When questioned, Mackenzie could not explain the anomalies and remained evasive when pressed further.

However, he then admitted to detectives he had set up as many as 70 false accounts in names similar to those of genuine bank customers.

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Mr Prentice said: "What initially appeared to the bank to be a small number of anomalies did not just snowball, but avalanched into a large, complex scheme.

"It became clear within four of five months of investigation that this was an embezzlement in the region of £21m. The police required considerably more time to investigate."

Defence counsel David Burns QC said the multi-million pounds fraud was committed by Mackenzie "for reasons of a misguided sense of service rather than personal gain".

"He did not benefit from this scheme, in the sense that he did not obtain any of the £21m. That £21m went to genuine customers of the bank," he said.

"As a business manager he felt under substantial pressure to process large numbers of loans to business clients. He responded to that pressure by advancing money, by-passing the banks monitoring systems," said Mr Burns.

"In order to disguise the fact the loans had been advanced he opened bridging accounts in false names, drew down funds into them and paid those funds to customers," said the defence counsel.

Det Con Mike Harris, of Lothian and Borders Police, who was part of the investigation team, said he believed it was the biggest-ever fraud case in Scotland.

He said Mackenzie did not have any of the trappings of wealth and appeared to be a straightforward family man.

He said it "beggared belief" as to why he had got involved in a fraud on such a scale for what appeared to be minimal personal gain.

"He has never offered any other reason for why he has done this, other than that he was under pressure at the bank," said Det Con Harris.

Financial crime expert Jeffrey Robinson said greed had been Mackenzie's undoing.

"The more money you take, the more risk there is that someone is going to find it, the more difficult it is to hide," he said.