The three British bankers due to be extradited this week in the Enron saga are accused of being in cahoots with the company's former chief financial officer Andrew Fastow to defraud National Westminster Bank of US$7.3 million ($12.1 million).
Former NatWest employees Gary Steven Mulgrew, Giles Robert Hugh Darby and
David John Bermingham were indicted in Houston in 2002 on seven counts of wire fraud for diverting profits due NatWest in 2000 from the sale of its interest in an Enron financing vehicle known as Swap Sub.
They will face the charges in Enron's hometown after exhausting appeals to be tried in the UK.
"It looks more like a straightforward embezzlement case than many of the other cases," former Enron Task force prosecutor Sam Buell said today.
Swap Sub was one of the off-balance sheet partnerships designed and operated by Fastow. He and his deputies used many of those partnerships to skirt accounting rules and hide billions of dollars in debt while skimming millions of dollars for themselves.
Fastow struck a plea deal with prosecutors and will serve 10 years in prison.
Prosecutors have said that the three former bankers, worried about their jobs because of the impending takeover of NatWest by Royal Bank of Scotland, plotted with Fastow and his deputy Michael Kopper to lie to NatWest and underestimate the value of Swap Sub.
The three are accused of then taking ownership stakes in a Fastow partnership, called "Southampton" after the CFO's Houston neighborhood. Southampton paid US$1 million for the investment and then quickly cashed out of it for US$20 million.
The indictment said the three bankers divided profits of more than US$7 million. Fastow, Kopper and others divided more than US$12 million, the indictment said.
Among the evidence against the trio are emails and presentations in which they are said to have discussed the deal and the need to hide it, prosecutors have said.
Prosecutors declined to comment on the case or to say whether Fastow and Kopper, who has also pleaded guilty and is cooperating with prosecutors, would testify at trial.
- REUTERS
