Bankers linked to Enron fraud face extradition

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The Independent US

Three British bankers accused of fraud relating to the $67bn (£36bn) collapse of Enron are facing a trial in America after the Home Secretary, Charles Clarke, ruled that they should be extradited.

Three British bankers accused of fraud relating to the $67bn (£36bn) collapse of Enron are facing a trial in America after the Home Secretary, Charles Clarke, ruled that they should be extradited.

Gary Mulgrew, 43, David Bermingham and Giles Darby, both 42, are accused of conspiring with senior Enron executives, including the former finance director Andy Fastow, to embezzle $20m from a NatWest investment in one of Enron's notorious off-shore operations. It is alleged that the three pocketed $2.3m each and made a profit of more than $12m for the two Enron executives.

Mr Fastow and his colleague Michael Kopper have admitted their role in the alleged scheme as part of a plea bargain. They could face up to 35 years in a US jail.

Enron imploded four years ago in the most spectacular fraud in modern US history. Its former chairman Kenneth Lay, a friend of and benefactor to the US President George Bush, will see all 11 charges against him tried next year.

Enron's collapse prompted the biggest overhaul of accounting and corporate regulations in decades and even cast its shadow over the White House. The company contributed $600,000 over the years to Mr Bush's campaigns.

The three men said yesterday they would appeal against the Home Secretary's decision to the High Court. Mr Bermingham called it "extremely disappointing but not overly surprising". He added: "We're certainly going to the High Court. [If necessary,] we'll go to the House of Lords, we'll go to the European Court of Human Rights, we'll go all the way."

A US federal court in Houston, Texas, indicted the men on seven counts of wire fraud in 2002. Douglas McNabb, a US criminal defence lawyer who has given evidence on behalf of the trio, said if the men were extradited, they would be detained in a high-security federal facility and would have restricted access to their lawyers. They would have to pay their own legal costs - about $2m each - and, unlike in Britain, they would be unable to recover those costs. They would have to fly out at their expense more than 30 witnesses and hire both US and UK legal teams.

The bankers argue that as British citizens accused of defrauding a British bank, with the alleged misconduct having taken place mostly in the UK, they should be tried here rather than in Texas, the home of Enron.

In a separate hearing on 7 June, the High Court will review the Serious Fraud Office's decision not to investigate the case. But even if the court rules that the SFO should investigate, the three could still be extradited.

Mr McNabb said there were about 35 other extradition requests from the US pending, the vast majority of which are related to financial fraud cases.

The Home Secretary backed an earlier ruling by a UK district judge last October. The case is the first big test of extradition laws introduced to fast-track terrorism cases, which could lead to a flood of extraditions to the US.

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