Former NatWest bankers fear 'unfair trial' if extradited to US

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The Independent Online

Three former NatWest bankers who are fighting extradition to the US over their alleged involvement in a £4m fraud linked to the collapse of Enron, would not get a fair hearing in Texas, and could suffer a breach of their human rights if deported, a London court heard yesterday.

Three former NatWest bankers who are fighting extradition to the US over their alleged involvement in a £4m fraud linked to the collapse of Enron, would not get a fair hearing in Texas, and could suffer a breach of their human rights if deported, a London court heard yesterday.

Speaking on the first day of a three-day hearing to determine whether the men should be extradited, Alun Jones QC, representing the trio, said his clients were almost certain to be placed on remand without bail for as long as 18 months before they would even stand trial. He said that due to their decision to appeal against their extradition from the UK, they would also be automatically classified as "fugitives", and would face an extra four years on their sentence if convicted.

Once a trial got under way, he added, it would be impossible for the group to receive a fair hearing given the level of publicity that has surrounded their case, which was first brought to light more than two years ago. Citing a recent survey, Mr Jones said 81 per cent of the Texan population who qualify to sit on a jury believe that anyone facing charges relating to Enron is guilty.

The defendants - Gary Mulgrew, David Bermingham, and Giles Darby, all 42 years old - have been charged by the US Department of Justice (DoJ) with wire fraud for their alleged involvement in a plot to siphon off some $7.3m (£4m) from an Enron subsidiary, in conjunction with the energy giant's former finance director, Andrew Fastow.

The trio, who worked for Greenwich Natwest, the investment banking arm of the UK bank, are alleged to have advised NatWest to sell its stake in the Enron subsidiary to another Fastow-run company for just $1m. Mr Fastow then instructed Enron to pay some $20m to the subsidiary before the sale was complete to unwind its transactions with the company.

The remaining $19m was then allegedly split between Fastow, Michael Kopper, a colleague of Mr Fastow, and the three UK bankers.

Speaking yesterday, Mr Jones said that in spite of the allegations by the US DoJ, no one had moved to bring charges against the trio in the UK. He said the defendants had contacted the Financial Services Authority, Serious Fraud Office, the City of London Police, as well as NatWest itself, all of which said they were not pursuing any action against the trio.

He added that the defendants had also offered their help to the US Enron enquiry, but had been told that only a guilty plea and the provision of more names involved with the alleged fraud would suffice. "This is not somebody burgled who hasn't reported the burglary. We made every genuine effort to ask that there's an investigation," he said.

Mr Jones said that although there was enough evidence to hold any trial of the three men in the UK, the only reason the US Enron investigators was pursuing the trio was "as a means to prosecute major figures in the Enron scandal".

"The reason these proceedings were advanced was to advance the case against American targets," he said. "It was simply a British means to an American end."

The hearing continues.

Separately, the role played by Enron's former chief financial officer, Andrew Fastow, in the energy trader's allegedly bogus energy trading deals, was highlighted in a US trial yesterday.

An executive who was Mr Fastow's senior assistant, Michael Kopper, told the US court how his "brilliant" former boss allegedly participated in a number of deals to artificially boost Enron's earnings.

Mr Fastow and Mr Kopper have pleaded guilty to committing crimes while at Enron and are co-operating with government prosecutors.

Mr Kopper told the court that Mr Fastow allegedly promised Merrill in a conference call in December 1999 that if the bank invested $7m in the barges it would not bear any risk because Enron would buy the stake back through one of its off-balance sheet vehicles.

Merrill denies it helped Enron manipulate its earnings, saying there was no guarantee that the company would re-purchase the stake in the barges.

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