The battle by three former NatWest bankers fighting extradition to the US took a new twist yesterday when their lawyer accused the US government of failing to disclose evidence that "fundamentally undermines" its case against them.
Gary Mulgrew, David Bermingham and Giles Darby are appealing against the Home Secretary's decision to allow their extradition to face trial in the US over Enron-related fraud charges. A three-day hearing in the High Court in London began yesterday and a ruling is expected next month or in the new year.
Alun Jones QC, for the three, said the district judge who authorised the extradition in October last year did not know Greenwich NatWest had acknowledged it did not lose any money in the alleged fraud. Had the information been disclosed, it would have shown the three men had "no case to answer," Mr Jones said. "The victim of the alleged crime does not claim to have been defrauded at all."
He also said the Financial Services Authority, the City's watchdog, "did not believe it had a basis to charge the appellants or recommend a prosecution".
Separately, the men have challenged the Serious Fraud Office's decision not to investigate their case in the UK. The High Court reviewed the decision two weeks ago but reserved judgment. Rulings in both cases are expected on the same day.
The bankers are accused of conspiring with senior Enron executives , including its former finance director Andy Fastow, to embezzle millions of dollars from a NatWest investment in one of Enron's off-shore operations. It is alleged they made about $7.3m (£4.2m) by misleading NatWest over the sale value of its stake in "swap sub". They deny the charges.
Mr Jones told the court fresh evidence showed the FSA had asked NatWest's parent Royal Bank of Scotland in 2002 to revalue its Enron investment and the revaluation yielded a figure of about $1m, in line with the original sale price. It also emerged that the counsel for the US government, John Hardy, admitted in June that the three had not committed any fraud against Enron.
The three have been indicted by a US federal court in Houston, the home of the disgraced energy giant Enron, on seven counts of wire fraud. They could face 25 to 35 years in prison in the US, without the possibility of parole. The three also say that as UK citizens accused of defrauding a British bank, with the alleged misconduct having taken place mostly in the UK, they should be tried in the UK.
The case falls under extradition laws introduced to fast-track terrorism cases, which could lead to a flood of extraditions to the US. Morgan Crucible's former chief executive Ian Norris is appealing against his extradition to the US on price-fixing charges. Wembley's former chief executive Nigel Potter was jailed for three years by a US court last month for conspiring to bribe John Harwood, aRhode Island politician.Reuse content