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Britons plead guilty to Enron-related fraud

29 November, 2007

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HOUSTON, Texas (AFP) - Three former British bankers pleaded guilty in a Texas courtroom Wednesday to a single count of fraud related to the scandal-ruined energy trading firm Enron.

A lawyer for the so-called "NatWest Three" said that after 17 months of isolation while awaiting trial in Texas, the trio decided to accept a plea deal in order to "move forward and do more productive things with their lives."

The men, who declined to speak to reporters, appeared relieved in court.

"Today is an important step - not the last - in bringing this terrible ordeal to an end," David Bermingham, Giles Darby and Gary Mulgrew later said in a statement.

Prosecutors dropped six other fraud charges in exchange for the guilty pleas and said they would recommend the men serve 37 months in jail out of a previously possible maximum sentence of 35 years.

They will be sentenced on February 27 and face a maximum penalty of five years in jail for the single fraud count.

The trio said they will apply to serve their sentence in Britain.

The Natwest Three have not spent a day in jail since they arrived in Houston, Texas on July 13, 2006 as they were each released on a million-dollar bond.

They were, however, required to stay in the Houston area and were not allowed to see each other except in the presence of their lawyers.

Bermingham, Darby and Mulgrew also agreed to repay the nearly 7.4 million dollars they pocketed after advising NatWest, now a unit of the Royal Bank of Scotland, to dispose of an obscure Enron-related offshore company for less than it was worth.

David Bermingham (C)

©AFP/Getty Images  Dave Einsel The plea deal came after the men spent years decrying their innocence against charges initially brought forward in September 2002 and launched a protracted battle against their extradition, saying they should have been tried in Britain, as the alleged fraud took place there against a British bank.

The three 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.

They received strong public support at home, including from top business executives, as their fight against extradition became a cause celebre.

The story took a tragic twist as parliament was debating the extradition when the body of another NatWest banker was found in an east London park.

Neil Coulbeck, 53, killed himself for fear he would be dragged into the scandal after he was questioned by US Federal Bureau of Investigation agents, even though he had been assured he was in the clear, an inquest found.

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

Giles Darby (L), Gary Mulgrew (C) and David Bermingham (R)

©AFP/Getty Images  Dave Einsel It was eventually ratified after lobbying from British officials.

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. It also made the name Enron synonymous with greed and malfeasance.

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

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

They entered pleas shortly after prosecutors revealed their alleged conspiracy against NatWest.

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.

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