NatWest 3 To Be Sentenced

Three British bankers are to be sentenced Friday for their roles in a fraudulent scheme involving collapsed U.S. energy company Enron.David Bermingham, Giles Darby and Gary Mulgrew each face up to five years in prison and a fine of up to $250,000.In November, the three men each pleaded guilty to one count of wire fraud as part of a plea agreement after initially saying they were innocent of colluding with former Enron Chief Financial Officer Andrew Fastow in a secret financial scam in 2000 to enrich themselves at their employer’s expense.

Federal prosecutors are recommending that U.S. District Judge Ewing Werlein Jr. sentence each of the men to just over three years in prison.

All three have also agreed to pay their former employer more than $13 million.

Their attorneys have said they will work with prosecutors to see if the bankers can serve part of their sentences in Britain.

The three former executives at Greenwich NatWest, a unit of Royal Bank of Scotland Group PLC, became a cause celebre in Britain throughout extradition proceedings that lasted two years. They were dubbed the “NatWest Three.”

In the United States, their case is a loose end from Enron’s collapse.

Greenwich NatWest had invested in a subsidiary of an Enron partnership controlled by Fastow, the architect of myriad fraudulent Enron schemes that helped fuel its spiral into bankruptcy proceedings.

In early 2000, the bank had valued its interest in the subsidiary at zero, but the three British men knew it actually had significant value.

A company under the control of Michael Kopper, Fastow’s former top aide, purchased the bank’s interest in the subsidiary for $1 million.

The bankers, who came to Houston, paid Kopper $250,000 for an interest in this company. Fastow falsely represented to Enron that the energy company would pay $20 million to Greenwich NatWest for its shares of the subsidiary.

But the $20 million actually went to the British bankers, Fastow and others. The bankers got $7.3 million while Fastow, Kopper and others skimmed about $12.3 million, according to the plea deal.

For their roles in Enron’s collapse, Fastow is serving a six-year sentence while Kopper was given a three-year, one-month sentence.

Enron, once the nation’s seventh-largest company, crumbled into bankruptcy in December 2001 after years of accounting tricks could no longer hide billions in debt or make failing ventures appear profitable. The collapse wiped out thousands of jobs, more than $60 billion in market value and more than $2 billion in pension plans.

Enron founder Kenneth Lay and former chief executive Jeffrey Skilling were convicted in 2006 for their roles in the company’s collapse. Skilling is serving a sentence of more than 24 years. Lay’s convictions for conspiracy, fraud and other charges were wiped out after he died of heart disease in 2006.

Source: The Associated Press (via

Update: Each of the three former NatWest bankers were sentenced on Friday to terms of imprisonment of 37 months.


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