Risk & Compliance

Brits May Face Enron Charges in U.S.

Three former NatWest bankers have argued that standing trial in Houston, where Enron is based, would be unjust and incompatible with European human...
Stephen TaubJune 22, 2006


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Three British bankers facing charges by the Enron Task Force have one final opportunity to avoid extradition to the United States.

In February the extradition appeal of David Bermingham, Gary Mulgrew, and Giles Darby was rejected by the British High Court, according to the Associated Press, and this the House of Lords refused to hear their appeal. The British Home Office has given them seven days to apply to the European Court of Human Rights, the AP added.

Bermingham, Mulgrew, and Darby — former executives at Greenwich NatWest, a unit of Royal Bank of Scotland Group — reportedly have asserted that since most of the alleged offenses took place in Britain, any trial should be held there and not in the United States. They have argued that standing trial in Houston, where Enron is based, would be unjust and incompatible with European human rights law, the AP added.

The Times of London observed that the case presents a challenge to the legal status of Britain’s fast-track extradition treaty with the United States.

“Obviously we are surprised and disappointed by the decision of the Lords, which seems completely out of context given the importance of the matter we were asking them to deliberate on, Mark Spragg, a lawyer for the three bankers, told the Times. “It seems that now there are no effective safeguards to prevent people being extradited to America.”

Bermingham, Mulgrew, and Darby were charged with wire fraud by the Enron Task Force in July 2002. The complaint alleged that through a series of transactions, the former NatWest bankers had secretly invested in an Enron special purpose entity called Southampton and were able to siphon off $7.3 million in income that rightfully belonged to their employer.

Southampton was an off-balance-sheet vehicle through which Enron employees including former chief financial officer Andrew Fastow received payments from LJM1, another partnership set up to buy and hold Enron assets.