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UK: British Bankers Fight Against Enron Extradition

by Simon Bowers The Guardian
June 22nd, 2004

Lawyers for three British bankers accused of plotting with senior Enron fraudsters to embezzle almost $20m, yesterday called for a magistrate to dismiss an extradition request from a Texas court, suggesting the alleged conspiracy was "none of their business".

Former senior NatWest bankers Gary Mulgrew, David Bermingham and Giles Darby are alleged to have duped the bank out of about $7.3m in what the Crown Prosecution Service, representing the US authorities, yesterday said was "a story interwoven with the collapse of Enron".

The bankers' two alleged co-conspirators - Enron chief financial officer Andrew Fastow and his lieutenant at the energy firm Michael Kopper - have entered into broad plea-bargain agreements in the US and signed statements admitting their role in an alleged plot with the British bankers. The bankers are alleged to have hatched a plot with Fastow and Kopper involving the hugely undervalued sale of NatWest's interest in an elaborate offshore corporate structure, controlled by Fastow, which had been set up to provide Enron with a hedge against various liabilities.

In 2000 Fastow told his Enron colleagues he needed $20m to unwind NatWest's interest in the structure. In fact, US authorities claim, $7.3m was split equally among the British bankers, while Fastow and Kopper shared $12.3m.

The US claim emails between the British bankers provide details of the plot. One email said: "The story looks compelling, and even Andy would have trouble arguing that the benefit split is anything other than equitable." Another said: "We should be able to appeal to his greed." A reference to Fastow, the US suggests.

Alun Jones QC, counsel for the bankers, told Bow Street magistrates' court of his concern about relations between the US and UK authorities under the terms of Britain's new Extradition Act, which does not require the US to produce evidence of crimes alleged. "If the US authorities say 'jump' and the UK authorities immediately leap into the air, we should be told at the outset of this case."

Mr Jones noted that the alleged victim of the fraud was a British bank; the defendants were British; and that "90% of the alleged scheme took place in England".

He suggested that seven counts of wire fraud on the US indictment against the bankers were peripheral to the core allegations of UK-based fraud. The charges should not, therefore, be regarded as meriting extradition, he said "Any normal, sensible person would regard this as none of their [the US authorities'] business ... We want to know why is this case not being tried in the UK?"

Mr Jones said the new act raised particular concerns as it released the home secretary from a discretionary role in this kind of extradition decision. "If somebody has been extradited from this country there is no person who is accountable for it. There is nobody now who has the responsibility for saying: 'This extradition is fair'."

Mr Jones is preparing to make further objections to extradition, claiming the bankers would not face a fair trial in the US. Lawyers say they would be under pressure to enter into plea-bargain agreements in the knowledge that more than 90% of defendants who do not do so in Texas are later found guilty.

 





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