Risk & Compliance

Three Years for Three Enron Bankers

The so-called Nat West Three had pleaded guilty to their role in the energy giant's fraud.
Sarah JohnsonFebruary 22, 2008

Three former employees of a British bank will spend up to 37 more months on America’s shores, behind bars, for participating in the massive Enron fraud.

On Friday, a federal judge sentenced David Bermingham, Giles Darby, and Gary Mulgrew to just over three years in prison, according to the Associated Press. Extradited to Texas in 2006 to face the fraud charges, they used to work for National Westminster Bank and helped Enron executives, including CFO Andrew Fastow, with secret investments.

All three pleaded guilty last fall to one count of wire fraud. They had previously been scheduled to stand trial, with Fastow and Michael Kopper, Enron’s former managing director of global finance, expected to testify.

According to the AP, the former bankers’ attorneys are negotiating with U.S. prosecutors to divert some of their three-year sentences to Britain.

They have since admitted to secretly investing with Fastow and Kopper in a shell company called Southampton L.P. Southampton was a Fastow-created entity for purchasing an asset the three bankers were selling on behalf of Nat West, according to U.S. Assistant Attorney General Alice Fisher. The trio invested a total of $250,000 in Southampton to gain an ownership interest in the company that they were charged with selling for Nat West.

Prosecutors accused the bankers of hiding their scheme from their employer through several financial transactions, including the use of options and offshore entities. In May 2000, within weeks of their investment, Bermingham, Darby, and Mulgrew each received approximately $2.83 million.

Under the plea agreement, the former bankers will repay the Royal Bank of Scotland (Nat West’s successor bank) more than $13 million, the AP notes.