A high-street bank was anonymously tipped off that a gang of fraudsters had access to millions of pounds of savers' cash, a court heard.

The fraud department at Abbey received an unsigned letter alerting it to a national identity scam that was plundering hundreds of thousands of pounds from its elderly customers.

A jury has heard that a Bradford businessman has pleaded guilty to his part in the fraud. Syed Shazad Ali, 40, of Thirkleby Royd, Clayton, put almost a quarter of a million pounds of bond-holders' cash into an account he opened at HSBC, Market Street, Bradford, on October 7, 2004, the court heard. The account was opened in the name Westomatic, trading as CEA.

Three people allegedly involved in the widespread fraud have gone on trial at Leeds Crown Court.

Gemma Eggleton, acting assistant branch manager with the Abbey, was only 18 when the prosecution say she dishonestly closed down bond accounts and issued cheques to members of the fraud ring. Eggleton, now 20, of Bromley, Kent, denies three charges of conspiring to defraud Abbey customers.

Birmingham businessmen Ajvinder Singh, 45, and Manjit Power, 43, deny two charges of money laundering and conspiracy to defraud.

Graham Campbell, fraud investigator with the Abbey, yesterday told the jury of the anonymous tip-off that alerted the bank to the large-scale scam. A hand-written letter received by the bank's fraud department in early December 2004 began: "I wish to inform you of the fraudulent activities going on at your bank."

It stated that fraudsters had details of customers with bond investments and were making fake IDs, using Abbey staff as contacts, to close bond accounts and issue bank drafts to different account names.

The writer urged the Abbey to start screening properly' anyone needing to close a bond investment and to immediately investigate bonds that had been closed at the Sydenham and Forest Hill branches "to mention but a few". The letter concluded: "These fraudsters have millions of pounds worth of bond investment details. Make this information secret and act quickly."

The jury heard that acting branch manager at Forest Hill, Craig Jackson, had pleaded guilty to his part in the fraud.

Eggleton, who described herself on her CV when she applied to the bank as "reliable and trustworthy" had just transferred from the Sydenham branch to Orpington.

Mr Campbell said he began investigating cases where elderly people's bond accounts had been suddenly closed, incurring financial penalties, and the cheques made out to a third party payee.

The trial continues.