BRITAIN: Three British former bankers extradited to the United States this week pleaded not guilty in federal court yesterday to fraud charges linked to a deal with defunct energy giant Enron Corp.
In Houston, Texas, magistrate Judge Stephen Smith said he was not immediately able to rule on whether David Bermingham, Giles Darby and Gary Mulgrew, former employees of National Westminster Bank, should be released on bond pending their trial. He scheduled a second hearing for Monday to decide.
They were initially charged in June 2002 when the justice department's sweeping investigation of Enron's December 2001 collapse had just begun to gain momentum. According to their indictment, they persuaded NatWest to sell at a fraction of its true value an investment in which the men later took a stake and reaped $7.3 million (€5.7 million).
They arrived at the federal courthouse in Houston to face the charges, having lost a four-year battle to avoid extradition.
They are each charged with seven counts of fraud for allegedly colluding with former Enron chief financial officer Andrew Fastow in a financial scam in 2000 to enrich themselves each at their employers' expense. They face a maximum of 35 years in prison if convicted of all charges.
Their indictment says they siphoned $4 million (€3.1 million) while Fastow and others skimmed $6.7 million (€5.3 million) from the scheme. They have consistently denied any wrongdoing.
The three, former executives at Greenwich NatWest, a unit of Royal Bank of Scotland Group, became a cause célèbre in Britain because of the controversial legislation used to pursue their extradition. Their case sparked a political storm over the fairness of a treaty used to extradite them.
The Enron inquiry reached its summit in May when a jury convicted company founder Kenneth Lay and former chief executive officer Jeffrey Skilling of perpetuating fraud through lies to investors and employees about the failed energy giant's financial health. Lay died last week of heart disease, but Skilling faces decades in prison and is to be sentenced on October 23rd.
Enron, once the seventh-largest US company, crumbled into bankruptcy proceedings amid revelations of convoluted finances that hid debt and inflated profits.
The bankers have fought extradition since their arrest in London in April 2004. Their case has garnered heavy interest in Britain, but in the US, it is a remnant of the early days of the investigation.
The House of Lords and the House of Commons mounted symbolic debates this week before the three men's departure to protest against Britain's compliance with a 2003 extradition treaty that has not been ratified by the US senate. MPs and peers lambasted Tony Blair's government and the US failure to ratify the treaty. Mr Blair has repeatedly defended the agreement. - (AP, Reuters)