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ENRON SCANDAL

'Natwest Three' are locked up

3 min

Three British bankers known as the 'Natwest Three', Giles Darby, David Bermingham and Gary Mulgrew, have been sentenced to 37 months in jail for their part in the 2001 Enron scandal, one of the biggest financial frauds in US history.

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A US federal judge on Friday sentenced three former British bankers dubbed the Natwest Three to 37 months in jail for fraud related to the scandal-ruined energy trading firm Enron.

Britons Giles Darby, David Bermingham and Gary Mulgrew pleaded guilty in November to conspiring with former Enron finance chief Andrew Fastow to bilk NatWest, now a unit of the Royal Bank of Scotland, of more than 7.3 million dollars.

According to their signed plea deal, they advised NatWest to dispose of an obscure Enron-related offshore company for less than it was worth and then, with Fastow's help, bought the stake and flipped it for a handsome profit.

The 2002 indictment against the NatWest Three was widely seen as the heat necessary to get Fastow and his deputy Michael Kopper to cooperate with federal investigators.

But while Enron executives became a symbol of greed and corporate malfeasance, the Natwest Three became a cause celebre after proclaiming their innocence and launching a protracted battle against their extradition to the United States, saying they should have been tried in Britain, as the alleged fraud took place there against a British bank.

Then-British Prime Minister Tony Blair's government came under intense political pressure because the US-British extradition treaty -- originally intended for terrorism suspects -- had not yet been ratified by the US Congress.

It was eventually ratified after lobbying from British officials.

Since arriving in Houston, Texas, in July 2006, the NatWest Three have been free on bail, living in rented apartments and wearing electronic monitoring devices.

They were barred from associating with each other without a lawyer present until they reached their plea deal with federal prosecutors in November.

The men complained repeatedly in court papers that they could not mount an adequate defense when all the witnesses and documents they required were in Britain.

Thousands of people in the United States lost their jobs and life savings when Enron collapsed in late 2001 with an estimated 40 billion dollars in debt, hidden through financial deals and often kept off the books of the Houston-based energy trading group.

The scandal undermined faith in corporate America and led to a massive stock-market sell-off.

The US Justice Department responded by setting up a task force which has aggressively pursued all those involved.

Fastow, who proved a contrite and critical witness in gaining convictions against Enron founder Kenneth Lay and former chief executive Jeffrey Skilling, is now serving a six-year jail sentence.

Kopper is serving a three-year jail sentence.

Lay died of heart failure before he was sentenced and had his conviction on 10 counts of fraud, conspiracy and banking violations thrown out because he could not appeal the verdict.

Skilling is currently serving a 24-year sentence.

The duration of the Natwest Three's prison term could be abbreviated if they are allowed to transfer to a jail in Britain under an international prisoner transfer program. There, they would be eligible for parole, unlike in the United States.
  

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