Three former British bankers indicted for fraud
Friday, September 13, 2002
WASHINGTON -- Three former British bankers were indicted Thursday on wire fraud charges connected to an alleged $7.3 million scheme involving Enron Corp.
A criminal complaint against three former employees of National Westminster Bank -- Gary Mulgrew, Giles Darby and David John Bermingham -- was filed by the Justice Department's Enron task force in June.
The indictment, filed in the U.S. District Court for the Southern District of Texas, alleges the former bank officers secretly invested in an Enron entity -- Southampton LP -- through a series of financial transactions.
With the secret investments, the bankers were able to siphon off millions in income that belonged to their employer, the Justice Department alleges.
The indictment against the bankers follows the August guilty plea of former Enron executive Michael Kopper, the first company executive to admit guilt in the government's investigation into the downfall of the company.
The scheme included both Kopper and former chief financial officer Andrew Fastow, the indictment states.
The three bankers split about $7.3 million. The indictment states that Fastow, Kopper and others made $12.3 million from the scheme. No charges have been filed against Fastow.
The bankers were employed by the finance group of Greenwich NatWest, a division of NatWest with offices in Greenwich, Conn., and London. At the time, NatWest was considered a "Tier 1" bank by Enron, which meant it was among a small group of banks that did the most business with Enron and it was given preferential treatment by the company.
Greenwich NatWest, the merchant banking division of NatWest, is now part of Royal Bank of Scotland, which said in June after the charges were brought that it would cooperate with the Enron investigation.
The government also alleges the three men recommended that an interest in an Enron-related partnership held by NatWest be sold for $1 million even as they schemed with Enron executives to purchase that interest for $250,000.
Prosecutors allege that some Enron executives were able to transform amounts of less than $500,000 into millions by using the method the three bankers are accused of. Fastow transformed a $25,000 contribution from a family foundation into $4.5 million in a matter of weeks, according to a special report by Enron's board.