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Three British bankers charged with fraud in the Enron scandal could face up to 17 years in prison in the US after American authorities recently began extradition proceedings. Gary Mulgrew, Giles Darby and David Bermingham were charged in the US two years ago with stealing US$7.3mn from their then employer Greenwich NatWest, an investment banking division of the finance giant later bought by Royal Bank of Scotland.

The three were arrested by British authorities in May and face extradition hearings imminently.

It is alleged they siphoned funds out of Greenwich NatWest through a partnership controlled by Andrew Fastow, the convicted finance chief of collapsed US energy giant Enron.

Fastow has agreed a 10-year prison term as part of a plea bargain in which he is helping prosecutors bring other Enron executives to book.

The bankers’ case has been taken on by London fraud lawyer Mark Spragg of solicitors Jeffrey Green Russell, which specialises in white-collar crime and extradition cases.

He says the three want their case heard in the UK. “What they object to is being dragged across to the US when they were here, the alleged victims were here and the transaction allegedly occurred here,” he says.

Spragg adds: “They are not shirking their responsibility. In November 2001 they voluntarily went to the Financial Services Authority and gave a long, tape recorded statement.”

US prosecutors accuse the three of ‘wire fraud’, of illicitly gaining money through transactions which in part went through the US banking system. They are each said to have made around US$2.4mn after vastly underselling a Greenwich NatWest interest in an Enron entity, in association with Enron executives, then skimming the profit.

Spragg says the three never worked in the US, were not part of NatWest’s American trading divisions and that they met Enron executives once in the US, and only then in a social capacity.

A critic of the new UK-US extradition treaty signed by Home Secretary David Blunkett, Spragg says the three could face US jail terms of 17 years.

The hearing could be a test of American prosecutors’ abilities to extradite UK nationals without having to show a prima facie case, a ‘fast-track’ change in arrangements which has recently caught the Muslim cleric Abu Hamza al-Masri and which, say lawyers, could be challenged under human rights law.