Bankers retract confessions

Photo / NZ Herald

They became poster boys for high finance fraud when they confessed to stealing US$7.3 million ($10.3 million) in an Enron-related fraud.

But the convicted British bankers once dubbed the "NatWest Three" are now recanting their guilty pleas, claiming they were extracted under duress by a flawed American justice system.

Recently released from prison after serving half of their 37-month jail sentences for a scam dreamed up with corrupt Enron executives, two of the NatWest Three, David Bermingham and Gary Mulgrew, are far from remorseful.

They have launched a ferocious attack on their controversial extradition from Britain to the US in 2005 and subsequent imprisonment, claiming they only admitted fraud in order to get home as quickly as possible after frustrating delays in their criminal trial.

In a two-hour-long video on the website Ungagged.net, which is dedicated to exposing "prosecutorial abuses" in the Enron saga, Bermingham compared the US system of plea bargaining to "Stalinist Russia", while Mulgrew asserts his ordeal was akin to "torture".

"They ripped me away from my country, away from my family and friends," said Mulgrew. "Torture takes many forms. They delayed the trial."

Bermingham and Mulgrew, with colleague Giles Darby, were at the centre of a furore over Britain's extradition treaty with the US that sparked questions in Parliament and a march by business executives on the Home Office.

The trio persuaded their employer, Greenwich NatWest, to offload a stake in an Enron-related investment venture in the Cayman Islands for a rock-bottom price of US$1 million. Unbeknown to NatWest, they held a stake in the purchaser, through a deal cooked up with Enron's then finance director, Andrew Fastow, and the conspirators sold at a profit of US$20 million.

Pleading guilty in front of a Texas judge in February 2008, the British bankers delivered grovelling apologies. Bermingham said his conduct "fell well below the standards expected" while Mulgrew accepted that an offshore transaction in the Cayman Islands "lacked integrity", adding: "I apologise unreservedly for my actions."

But the men now say their confessions were drawn out of them by the pressure of extradition to the US and a two-year hiatus in Houston with little money and minimal family contact.

Bermingham said he feared a mistrial if a jury failed to reach a majority verdict, further prolonging the trio's stay.

"The government made it clear to us that if we agreed to plead guilty, they would recommend that we got sent home under the prisoner transfer treaty so that we could spend a good proportion, if not a majority, of our sentences in the UK where would could be close to our wives and families. But if we went to trial and lost, they said they would ensure we spent all of our sentence here [in the US]."

As part of their sentence, the trio were obliged to pay back US$7.3 million to Royal Bank of Scotland, which now owns NatWest. An RBS spokesman said they had reached a settlement.

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