A federal grand jury in Houston yesterday indicted three British bankers on wire-fraud charges in connection with an alleged scheme to swindle their employer out of $7.3 million and enrich themselves and senior executives at Enron Corp.
The indictment comes weeks after criminal charges against the men were laid out in a detailed court filing by FBI agent C. Deanne Simpson. A Justice Department spokesman said the trio, British citizens, are not in U.S. custody.
The seven-count indictment names David Bermingham, Giles Darby and Gary Mulgrew, former employees at National Westminster Bank PLC who allegedly conspired with Enron’s onetime chief financial officer and his key aide by using a secretive offshore partnership to siphon off money owed to the bank.
“We will now start the process of seeking their being brought to the United States to face the charges,” said Bryan Sierra, a spokesman for the Justice Department’s criminal division.
Negotiations between the Justice Department’s Enron Task Force and representatives of the bankers are continuing, according to sources familiar with the talks.
John Reynolds, a London-based lawyer for the men, could not be reached for comment yesterday.
Michael J. Kopper, a former global finance director at Enron, pleaded guilty last month to conspiring with the British bankers and Andrew S. Fastow, Enron’s former chief financial officer, to defraud the company. Fastow, who has not been charged, was the architect of many of Enron’s off-balance-sheet partnerships, which hid millions of dollars in debt at the now-bankrupt Houston energy trader.
Kopper and Fastow reaped $12.3 million from the deal with the British bankers, according to the indictment.
“There were co-conspirators on this side of the Atlantic,” said Christopher Bebel, a former prosecutor who is now a securities lawyer at Shepherd, Smith & Bebel in Houston.
“There’s a distinct possibility the testimony of these people could help implicate people at Enron.”
A spokesman for Fastow declined to comment last night.
Legal experts said prosecutors are telegraphing a potential case against Fastow in court papers filed against the bankers and Kopper. The Justice Department last month froze about $20 million in assets controlled by Fastow and his relatives by arguing that they were the tainted proceeds of fraud.