Natwest three to be extradited to the us on fraud charges

GREENWICH, CONNECTICUT – Three former UK bankers will be extradited to the US to stand trial for defrauding Greenwich NatWest, a Connecticut-based subsidiary of NatWest, which is now part of Royal Bank of Scotland, of some £4.2 million by investing in an off-balance sheet Enron partnership.

David Bermingham, Gary Mulgrew and Giles Darby – all former investment bankers with NatWest in London – had appealed to the High Court in the UK to overturn the extradition order made by a Bow Street district judge. The order had also been confirmed by Charles Clark, the Home Office minister, last year.

The three have fallen foul of a new extradition treaty negotiated by Prime Minister Tony Blair in 2003, in which the US simply has to allege that an "extraditable" offence has been committed to justify a request for an extradition – that is, an offence that carries a maximum prison sentence of at least one year. The US Congress has not ratified the US-side of the bargain, however, so the UK still has to submit supporting evidence for any of its extradition requests.

The three are accused of advising their employer to sell part of a stake in an Enron business for much less than that stake was worth in 2000. Then, the three left NatWest, bought into the business that had been sold, and resold it for more money, pocketing about £1.5 million each.

Critics point out that the three bankers worked for a British bank at the time, are British citizens, and their 'victim' was a British bank. Also, the Serious Fraud Office has declined to investigate the matter. The three are now appealing to the House of Lords, the UK equivalent of the US Supreme Court.

The US authorities, who uncovered the transaction during their inquiries into the collapse of power company Enron, are planning on charging the three with seven counts of illegally gaining money through international banking systems.

According to legal sources, several other UK executives are watching this case nervously, as there are potential extradition requests in process as well. The three face up to 35 years in a maximum security prison in the US, and will have to pick up their own legal costs, even if acquitted.

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