Enron trio lose extradition fight

Three British bankers have lost their High Court battle against extradition to the US to face charges in connection with the Enron scandal.
Lord Justice Laws ruled that the case involving the former NatWest trio was "perfectly properly triable" in the US.

David Bermingham, Gary Mulgrew and Giles Darby have always maintained their innocence and argue that they should be tried by a British jury.

Enron collapsed in 2001 after admitting inflating profits and hiding debts.

Mr Bermingham of Goring, Oxfordshire, Mr Mulgrew of Sible Hedingham, Essex, and Mr Darby of Lower South Wraxall, Wiltshire, have been accused of seven counts of "wire fraud" by the US.
According to the allegations, the men advised NatWest in 2000 to sell part of an Enron business it owned for less than the stake was worth.

The trio then left NatWest, bought into the firm themselves and sold it off for a much higher fee, pocketing a total of $7.3m in the process, prosecutors say.

'Unduly simplistic'

But the court dismissed their claims that because the offences they are charged with are not extradition offences, forcing them to stand trial in the US is unjust and breaches European human rights laws.

This judgment means that no UK person or body has to decide which country should prosecute an alleged offence involving more than one country

Mark Spratt, Enron trio's solicitor

Lord Justice Laws said it would be "unduly simplistic to treat the case as a domestic English affair".

"The fact that the defendants could be prosecuted here - and that there would be consequential advantages and disadvantages from the prosecution and defence perspectives - does not amount to an exceptional circumstance," Lord Justice Laws added.

The judgement marks the first test case in the UK under the government's Extradition Act 2003 - which was developed in the wake of the 11 September attacks in 2001.

'No protection'

The decision prompted the men's solicitor Mark Spratt to warn that the case would have far-reaching consequences.

"This judgment means that no UK person or body has to decide which country should prosecute an alleged offence involving more than one country," he told journalists.

"The US justice system has a long and aggressive extra-territorial reach, and will increasingly apply for the extradition of UK citizens for allegedly criminal conduct committed against UK institutions," he added.

Speaking outside the court, Mr Bermingham added he was saddened that the government was using its citizens as "political currency".

ENRON'S FALL
Oct 2001: Accounts black hole becomes public knowledge
Dec 2001: Enron admits inflating profit, files for bankruptcy
It emerges Enron used a complex web of transactions to hide debt
2002: Criminal inquiry launched
Jan 2004: Ex-finance chief Andrew Fastow pleads guilty, accepts 10-year jail term
Feb 2004: Ex-CEO Jeffrey Skilling pleads not guilty to fraud and insider trading charges
Jul 2004: Ex-chairman Ken Lay indicted


Q&A: Why Enron collapsed

"There appear to be no legal protections against this at all."

The case has provoked widespread debate in the UK business world.

Company bosses are concerned that the treaty has created an "unequal" balance between the US and UK, as the US is not required to provide "primae facie" evidence of wrongdoing to extradite a UK citizen.

However, British requests to the US must still provide evidence of "probable cause".

Enron's founder, Kenneth Lay, and former chief executive, Jeffrey Skilling, are currently on trial in Texas after pleading not guilty to more than three dozen counts of insider trading, fraud and lying on financial statements.

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