An 89-year-old widow with dementia was able to withdraw more than $300,000 in cash with assistance from bank tellers in an astonishing series of transactions in the 34 months before her death.

It is alleged that in one instance, staff at Westpac Masterton stuffed $23,000 into an envelope - estimated to be 8cm thick - then handed it to the pensioner despite her not having a handbag.

After she died, her daughters were stunned to learn the family matriarch had made 70-plus teller-assisted cash withdrawals at the same branch totalling $305,000 between September 2017 and July 2020.

They say the wealthy pensioner - who always carried $100 notes - in fact lived frugally, and there’s no indication she spent the cash on herself. Most of the money remains unaccounted for.

“I was gobsmacked,” the woman’s daughter told the Herald.

“This is just bank withdrawals. So it doesn’t include paying utilities, paying her credit card, anything like that, and they didn’t query it at all.

“She had no mortgage on her house. She had her car paid off. What the hell did they think she was spending the money on?”

Westpac is defending its actions, saying the customer was “confident and savvy with money”, but private about her finances and staff “ultimately acted on her instructions in processing the withdrawals”.

Bank statements show the biggest cash withdrawal was $24,000 in May 2019, with more than $60,000 in cash drained from her account in that month alone.

The family are now questioning what checks Westpac made before repeatedly handing over the huge wads of money.

Relatives tried to track the funds but believe more than $200,000 has disappeared and suspect the beloved grandmother was the victim of financial elder abuse.

“I can’t prove it but the money is missing. And the $23,000 she withdrew three weeks before she died, that was gone from her house.”

The daughter said she knew “something was off” about her mother leading up to her death. She was angry and made comments about “people fleecing her for money”.

The family contacted police who investigated a person of interest, but there was no proof the individual received the money and the case was eventually closed.

To make matters worse, the daughter said that due to her mother’s wealth, Westpac assigned the elderly customer a personal “banking relationship manager”.

Concerned about her mother’s deteriorating health, the daughter contacted the private banker in February 2020. A note was added to the woman’s file stating she was a vulnerable customer, with a warning “to take care with any large/unusual transactions”.

Despite the warning, she was able to withdraw a further $50,000 in five separate teller-assisted cash withdrawals over the next few months, before her death on July 30, 2020.

The daughter recalls accompanying her mother into the Masterton branch on what would be the woman’s final trip to the bank, when she withdrew the $23,000.

The daughter said she had no idea how much money her mother was taking out, but heard the teller say, “That’s a large amount of money”.

On seeing the frail woman clutching the envelope of cash, the daughter suggested stowing it in her own bag for safety.

“They let her walk out without a handbag with a Westpac envelope stuffed with cash. It was probably like 8cm thick.”

The wealthy pensioner had banked with the Masterton branch of Westpac for decades before her death in July 2020.

After the mother’s death, the daughter - who held power of attorney - checked her mother’s accounts to see if she’d made any other large cash withdrawals.

She was shocked by the scale of in-branch transactions - her mother had withdrawn more than $200,000 in cash during the last 18 months of her life.

The daughter then confronted bank staff who allegedly told her they were “too scared” to ask the octogenarian what the money was for, suggesting she “maybe wanted to purchase a mobility scooter”.

“I was like, ‘What the hell’.

“She was 89, she was fragile. She was like 48kg, she was this tiny little woman. I mean come on.

“She didn’t bite but she was feisty. She had this presence about her and as the dementia got worse she got feistier.”

Staff at Westpac Masterton helped an elderly widow withdraw more than $300,000 in cash in the 34 months before she died. Photo / Google

The family lodged a formal complaint with Westpac this year. They claimed the Australian-owned company - which earned nearly $1 billion in profit last year - had failed in its duty of care to a vulnerable, elderly client.

The family asked why Westpac tellers allowed the large cash withdrawals to occur without questioning their mother, especially after the vulnerable customer alert was added to her file.

They have now complained to the Banking Ombudsman.

In a letter last month, Westpac said the woman was “very well respected” at her local branch. Staff did not believe there were “vulnerabilities” and there was nothing suspicious about the numerous cash withdrawals.

“It was common for [the woman] to withdraw money, as this is how she wished to operate her bank account/finances.

“You have previously indicated your mother was not someone you would question regarding her funds and as such the branch staff were of the same opinion.”

Westpac is defending its actions, saying the woman was confident and savvy with her finances, and there was no sign of "vulnerabilities".

In a statement to the Herald, Westpac said the woman was a frequent visitor to the Masterton branch and would “regularly withdraw sums of cash that were well within her financial means”.

Staff queried the purpose of the cash withdrawals “on several occasions”.

“However she was very private about her finances, which was acknowledged by her daughter ... and our staff ultimately acted on her instructions in processing the withdrawals.”

An “extra care” code was loaded on the woman’s account in February 2020 at the daughter’s request, prompting additional questions about the cash withdrawals.

The customer made three withdrawals the following month totalling $25,000, telling staff she needed the money due to Covid-19 lockdowns.

When queried about her final $23,000 withdrawal, she said she was unsure when she would next be able to visit the bank.

Staff were “comfortable” presenting the cash in an envelope because the woman was accompanied by her daughter.

Senior Sergeant Gareth Barnes said police were notified in August 2020 that an elderly woman had withdrawn large sums in the 18 months prior to her death.

Police made inquiries, speaking with the woman’s family and people close to her, and assessing CCTV of the withdrawals.

As the money had been withdrawn in cash, police were unable to identify who may have received it and the case was filed as there were no further lines of inquiry.

“We know that elder abuse is generally carried out by someone close to the victim that they trust,” Barnes said.

“Offenders rely on building a relationship with a person [who] is vulnerable and grows to depend on them and can result in financial exploitation.

“If you notice a pattern of missing belongings or property, changes in power of attorney or bank accounts, unpaid bills or someone taking an unusual interest in your loved one’s finances – notify police.”

Lane Nichols is a senior journalist and deputy head of news based in Auckland. Before joining the Herald in 2012, he spent a decade at Wellington’s Dominion Post and the Nelson Mail.