HOUSTON-- Three British bankers facing Enron-related fraud charges must stay in the United States pending trial, a judge ruled Friday.
AP
Gary Mulgrew, one of three British former bankers, leaves the federal courthouse after his first court appearance concerning fraud charges in connection with the Enron scandal, July 14, 2006.
U.S. Magistrate Stephen Smith sided with federal prosecutors in granting a bond that blocks the trio from returning to England and possibly launching another lengthy extradition battle after losing a string of appeals over more than two years.
"The problems posed by allowing the defendants to return to the U.K. are very substantial," Smith said.
The three men -- David Bermingham, Gary Mulgrew and Giles Darby -- were extradited to Texas last week. They face seven counts each of wire fraud for allegedly colluding with former Enron Chief Financial Officer Andrew Fastow in a secret financial scam in 2000 to enrich themselves at their employers' expense.
Smith said he was concerned about lack of U.S. jurisdiction if they left so they "will be restricted to the U.S."
The three had been free on temporary bonds in Houston since their initial July 14 hearing, in custody of a defense attorney and wearing electronic monitoring devices that allow federal officials to track their movements.
They're scheduled to go on trial in September.
Federal prosecutors had said they would agree to a bond, rather than keep the trio incarcerated until trial, as long as it required them to live in the United States. Prosecutors said their losing extradition fight showed them to be a flight risk because they didn't surrender willingly to U.S. authorities when originally charged in June 2002. If allowed to return home, they could initiate another extradition fight, the government argued.
The three men's lawyers countered that the men have jobs and families to support in London. If granted bond that would allow them to go home, they would waive extradition and continue wearing electronic monitoring devices. They also would agree to be under supervision of British authorities, post a combined $4 million in sureties signed by friends and members and pledge any other necessary assets.
The trio, former executives at Greenwich NatWest, a unit of Royal Bank of Scotland Group PLC, became a cause celebre in Britain throughout extradition proceedings. Several legislators lambasted Prime Minister Tony Blair's government and the American failure to ratify a treaty used to extradite them.
Blair has repeatedly defended the agreement.
In the United States, they are unknowns in the saga that began with scandal-ridden energy company's December 2001 failure and hit its summit with the May fraud and conspiracy convictions of Enron founder Kenneth Lay and former CEO Jeffrey Skilling.
The so-called "NatWest Three" were initially charged in 2002. Their indictment alleges that they came to Houston in 2000 to concoct a fraudulent scheme with Fastow, from which they siphoned $7.3 million while Fastow and others skimmed $12.3 million.
The men were arrested in 2004 and came to Texas on July 13 after losing their last appeal.
Fastow, the architect of myriad fraudulent Enron schemes, pleaded guilty to two counts of conspiracy in January 2004 and is awaiting sentencing. He testified against Lay and Skilling, and may testify against the British bankers.
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