David Bermingham, Gary Mulgrew and Giles Darby — the three former NatWest investment bankers facing possible extradition to the United States in connection with Enron-related fraud charges — are floating an unusual and creative legal strategy in England that amounts to a motion to change the venue of their criminal case to England. Here are prior posts on this interesting part of the Enron case.
The case is a test of a relatively new English extradition law that allows British citizens to be extradited to the United States without U.S. prosecutors being required to present prima facie evidence against them first in an English court. Last October, an English magistrate court ruled there was a good and proper basis for prosecuting the men in Houston in connection with the ongoing prosecutions of various former Enron executives.
Enron Task Force prosecutors claim that the three men conspired with former Enron CFO Andrew Fastow and his confidant Michael Kopper to defraud NatWest by secretly investing in one of Enron’s infamous off-balance sheet partnerships. The Task Force alleges that the three men conspired with with Mr. Kopper to persuade NatWest to sell its stake in the off-balance sheet partnership for $1 million when it was worth far more. A month or so later, the Task Force alleges that the partnership was sold for a cool $20 million, which allowed the three British men to share $7.3 million in profits. Most of the work on the transaction was carried out in England and the Cayman Islands.
In the trio’s latest motion in their continuing fight against extradition to the U.S., the trio challenges the English authorities’ failure to investigate the Enron-related allegations. The three men contend that a foreign government has charged them without evidence of committing a crime in England against an English bank. Inasmuch as the three men voluntarily brought the transaction to the attention of English authorities well before Enron prosecutors commenced extradiction proceedings, the trio reasons that English criminal authorities have an obligation to evaluate the case and decide on a threshold basis whether the charges should be tried in England, particularly in view of the fact that the case concerns alleged damage to an English financial institution.