Fraud-charge trio fight extradition

THREE London-based former NatWest investment bankers should be extradited to the US after taking part in a $20m (£11m) Enron-related scam to defraud their former employer , a court heard today.

Gary Mulgrew and Giles Darby, both 42, and David Bermingham, 41, have been charged by the US with conspiracy to defraud NatWest, now part of the Royal Bank of Scotland, in a transaction from which they each pocketed $2.38m, Bow Street Magistrates Court was told.

The court heard they worked in cahoots with two convicted former senior Enron employees, Andrew Fastow and Michael Kopper, in complex transactions that left NatWest $20m out of pocket.

The London trio have been charged with seven counts of wire fraud which allege the transactions went through the US and international banking systems. Fastow and Kopper had admitted their roles in the scheme - in which they together pocketed $12.3m - as part of a plea-bargaining designed to catch others involved in Enron-related frauds.

Counsel for the US government told the court the transactions took place in 2000 when the bankers' jobs at NatWest subsidiary Greenwich NatWest (GNW) were in jeopardy because of the Royal Bank of Scotland's takeover.

Mulgrew was head of structured finance at GNW and Darby was managing director of its energy division. GNW had offices in London and Greenwich, Connecticut, and NatWest had offices in Houston, where energy giant Enron was based.

'The three defendants designed and executed a scheme to convert GNW's interest [in an Enron subsidiary] to themselves and in so doing breached their fiduciary duty to GNW,' the US counsel said.

Mulgrew, Darby and Bermingham spoke in court only to confirm their names and dates of birth. Their counsel, Alun Jones, challenged the US government's right to extradite the three.

'Why is this case not being brought to trial in London?' he asked. 'NatWest bank is based in London. All three are UK nationals who live here. They are being investigated by the Financial Services Authority here and the US government is relying on interviews that have been given by the three to the FSA.'

Jones also sought assurances the three would not face other charges if extradited to the US over and above the indictments for wire fraud, which the court was told carried up to five years' jail.

The US counsel said: 'There is no expectation, anticipation or indeed the remotest possibility that further charges will be made.'

The hearing was scheduled to close today with further dates set for the autumn.