11/29/07

Reading through the Guardian online this morning I came across a very interesting article concerning three British bankers, nicknamed the "Natwest Three." Less than 18 months after their extradition to America prompted a political storm and allegations of injustice, David Bermingham, Gary Mulgrew and Giles Darby abandoned their declarations of innocence and pleaded guilty to stealing $7.3m (£4m) in a highly sophisticated transatlantic fraud linked to the collapse of the infamous and controversial energy trading powerhouse Enron. Although only owning up to one of seven charges of wire fraud under a deal struck with the US government, the men face 37 months in prison and must also pay back the $7.3m gains to the owner of Natwest, the Royal Bank of Scotland.

Title: Natwest Three plead guilty to $7.3m Enron-linked transatlantic fraud

Source: The Guardian

Date: 11/29/07

As I mentioned before, the charges stem from a highly sophisticated transatlantic fraud linked to Enron. In 2000, the men, who previously worked for Natwest's investment banking arm, concocted a deal with two senior Enron executives (who have since been jailed). In this deal, Natwest sold its stake in an Enron-related venture in the Cayman Islands for a knockdown price, and the men shared a secret profit on the side of $20m with their Enron counterparts. After being found out and extradited to America, the men were electronically tagged, restricted from working, banned from associating with each other and subjected to a curfew. Because these restrictions were emotionally and financially draining, Bermingham, Mulgrew and Darby decided to plead guilty to their charges and face jail time. Kenneth Kaiser, assistant director of the FBI's criminal investigative division, said the guilty pleas showed "the extent of the fraud at Enron went well beyond US borders."

This case involving the "Natwest Three" has prompted a debate about the fairness of Britain's extradition arrangements with the US. According to critics, Britain requires only basic information from foreign law enforcement agencies to send its citizens abroad. In contrast, though, the US demands evidence of "probably cause" and suspects are screened by a grand jury. Eoin O'Shea, an extradition expert at Simmons & Simmons in London, said: "It's a far less rigorous test in England now for extradition than it used to be. British defendants are at much greater risk than they once were." Supporters of Bermingham, Mulgrew and Darby argue that the men should have been tried in Britain instead of the US, but the electronic nature of international business has made the jurisdiction of fraud an argumentative basis. O'Shea added, "We're in a much more globalized world and crime is one of the most globalised of industries."

Since the initial hearing, Bermingham, Mulgrew and Darby remain on bail pending a formal sentencing hearing in February. The men have also applied for a prisoner exchange program in the hope of spending their sentences in a British jail.

It is now 2007 and the deal the "Natwest Three" made with executives of Enron occurred in 2000. The collapse of Enron occurred several years ago, and these men are only now being prosecuted? Am I the only one who sees a slight problem with this? Shouldn't the men have been found guilty years ago? Maybe I am missing something but it seems to me like their charges of fraud are long overdue. These men, in conjunction with directors at Enron, cheated many people out of money and pocketed ill-gotten gains as a result. I don't care how emotionally or financially draining this whole process has been for these men, they deserve their punishment. In fact, I believe they should be jailed for way longer than 37 months and be required to pay back way more money than $7.3m. These men have committed a crime of upmost significance and as such should be handled in such a way that requires them to pay back all of their wrongs. As the saying goes, "what goes around comes around," and the "Natwest Three" are finally getting the come around.