British bankers are told that they cannot fly home to await trial

Published on Saturday 22 July 2006 02:50

THREE British bankers facing fraud charges must stay in the United States while awaiting trial, after a judge yesterday called them "a flight risk".

The judge, Stephen Smith, sided with federal prosecutors in granting bail that blocks the trio from returning to the UK 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 UK are very substantial," Judge Smith said.

The three men - David Bermingham, Giles Darby and Gary Mulgrew, the Scottish son of Labour MSP Trish Godman - were extradited to Texas last week to face seven counts each of wire fraud for allegedly colluding with former Enron chief financial officer Andrew Fastow in a secret scam in 2000, to enrich themselves at the expense of their employers.

They had sought an unprecedented release back to Britain, arguing that they needed to return to keep their jobs, support their families and prepare their defence.

But Judge Smith said although he sympathised with some of their concerns he could not allow them outside the jurisdiction of US courts because it would risk another lengthy extradition proceeding. They will be "restricted to the US".

Mr Bermingham and Mr Darby have to deposit $250,000 (135,000) each in cash or credit guarantees with the authorities by the end of the month and a further $250,000 by October. Mr Mulgrew, who is less financially well off, must come up with a total of $200,000 (108,300) over the same period.

The judge also told the men not to associate outside their lawyers' presence, a standard clause in US cases.

"This is going to be tough," Mr Bermingham said outside the courthouse, complaining of the isolation in a "strange" land. "It might be regarded as a form of psychological torture."

Mr Mulgrew said, "I feel that my sentence has begun today."

The three had been free on temporary bail in Houston since their initial 14 July hearing, in the custody of a defence attorney and wearing electronic monitoring devices that allow federal officials to track their movements. They are scheduled to go on trial in September, but it is believed this could be delayed up to 18 months.

Earlier this month, under mounting pressure over the controversial extradition, which was made under a treaty which the US has not ratified, Tony Blair, the Prime Minister, made a public appeal for the American authorities to allow the men to serve their bail in Britain.

Their lawyers had said that if granted bail that would allow them to go home, they would waive extradition and continue wearing electronic monitoring devices.

But prosecutors said they would agree to bail, rather than keep the trio incarcerated until trial, only as long as it required them to live in the US.

In the US, they are unknowns in the saga that began with the scandal-ridden energy company's December 2001 failure.

Prosecutors say that in 2000, the three men advised their former employer NatWest to sell part of a company owned by Enron for less than it was worth. They left the bank and bought a stake in the firm before selling it on at a significantly higher price to make a huge profit, it is claimed.

Reacting to the news, Liberal Democrat leader Sir Menzies Campbell said: "This is profoundly disappointing, but hardly unexpected."