The downtown Federal Detention Facility is not normally the destination of choice for U.K. bankers traveling to Houston, but it is looking increasingly as if that’s where three former U.K. bankers embroiled in a transaction devised by former Enron CFO Andy Fastow will be spending a considerable amount of time in the near future.
As this Forbes article reports, former NatWest bankers David Bermingham, Giles Darby and Gary Mulgrew lost their High Court appeal to avoid extradition to Houston to face charges that they bilked their former employer of $7.3 million in one of the schemes allegedly engineered by former Enron CFO Andrew Fastow and his right hand man, Michael Kopper (previous posts are here). After the High Court’s decision was announced, the three ex-bankers said that they intend to appeal to the House of Lords, the U.K.’s highest court.
The case is particularly interesting because NatWest — the institution that the Enron Task Force contends was bilked by the three former bankers — never sought to recover the allegedly bilked funds from the three men, never pursued criminal charges against them in England, and neither the Crown Prosecution Service, the Financial Services Authority nor the Serious Fraud Office in the UK found sufficient evidence to prosecute. Had a trial taken place in the U.K., the three men could not be extradited to the U.S. because of the principle of double jeopardy, but since no British trial has taken place, the British Home Secretary has granted the Enron Task Force’s request under the Extradition Act of 2003, which was passed to facilitate extradition of suspected terrorists to the U.S. Under that legislation, the Home Secretary can extradite British citizens without the U.S. authorities having to make a prima facie case — they need only set forth a statement of the facts that they hope to prove. Moreover, the Extradition Act is not recipricol — to extradite an American citizen from the U.S., the British still need to provide evidence that the American citizen has committed an extraditable offense.
Thus, if the bankers lose their appeal to the House of Lords and are extradited to Houston, they will be forced to prepare the defense of their case while imprisoned in Houston’s Federal Detention Facility. Meanwhile, their main accusers — Fastow and Kopper — remain living comfortably in River Oaks and Montrose.
Chalk it up as another example of the high price of asserting innocence.