NatWest three make 'reluctant' plea

The mother of one of the NatWest Three bankers today said her son had pleaded guilty to an Enron-related fraud with “deep reluctance”.

The mother of one of the NatWest Three bankers today said her son had pleaded guilty to an Enron-related fraud with “deep reluctance”.

David Bermingham, 45, Gary Mulgrew, 45, and Giles Darby, 45, all from the UK, told the US district court in Houston, Texas, they wanted to change their plea to guilty yesterday following a deal with prosecutors.

Under the agreement, which has yet to be accepted by the judge, the trio would all serve 37 months behind bars and pay back a total of $7.3m (€4.9m) to the Royal Bank of Scotland, NatWest’s successor.

In return for the guilty pleas to one count of wire fraud, US prosecutors would ask for the six other counts to be dismissed and support the trio’s bid to “serve some of the sentence” in the UK.

The three men were extradited to the US under a controversial treaty 17 months ago.

Today Trish Godman, the mother of Glasgow-born Mulgrew, said: “My son Gary Mulgrew and his two colleagues are the victims of an unjust extradition treaty which breaches human rights and a Texan judicial system which has bled them financially dry and coerced them into a plea bargain.”

Mrs Godman, an MSP and deputy presiding officer of the Scottish Parliament, continued: “After 17 months of being tagged and under curfew in Texas, my son is drained emotionally and financially and has taken this step of plea bargaining with deep reluctance.”

She also stated: “It is my firm belief that their sentence, at the very least, be served in a British prison.

“My future efforts will be directed towards that objective.

“This has been a difficult and trying time for my family. I will be making no further public comment on the matter.”

The three men have admitted advising their former employer NatWest to sell part of a company owned by collapsed US giant Enron for less than it was worth.

They then left the bank and bought a stake in the company, Swap Sub, which they then sold on for a huge profit, making around $7.3m (€4.9m) themselves.

Bermingham, of Goring, south Oxfordshire, Mulgrew and Darby, of Lower Wraxall, Wiltshire, have all been described as “ordinary family men” and are known to be keen to return home to the UK as soon as possible.

Outside court, with all three defendants at his side, lawyer Reid Figel said the guilty pleas were “an important first step to bringing this terrible ordeal to an end.

“Nothing is yet finalised.

“By changing their plea, Gary, Giles and David have fully accepted the responsibility for the significant lapse of judgment that led to the filing of these charges and which has caused them to be separated from their family and friends in the UK for more than 17 months.

“Finally, we look forward to working with the United States British governments to promptly transfer Gary, Giles and David back home to serve their sentence, as expressly contemplated by the plea agreement.

“We have no other comment at this time except to say that Gary, Giles and David are deeply grateful for the unwavering support of their family, friends and countless supporters in the UK, and their friends and supporters in Houston.”

The three men are due to be sentenced on February 22, but Dan Cogdell, defending Bermingham, urged the judge to consider bringing the sentencing date forward.

“Crudely put, they can’t get out until they get in,” he said.

Earlier during the 35-minute court hearing, Judge Ewing Werlein Jr questioned all three men as to whether they were mentally or psychologically able to understand the proceedings and their guilty plea.

When asked by the judge whether they had consumed any alcohol in the past 24 hours, Darby said he had one bottle of Miller Light with his dinner last night and Mulgrew said he had drunk two pints of Boddingtons.

Bermingham said he had not taken any alcohol in the last 24 hours.

Mulgrew, wearing a navy blue pin-stripe suit; Darby, wearing a blue suit with a yellow tie; and Bermingham, wearing a black suit with a grey tie, stood with their lawyers in a line in front of the judge’s bench as they answered a series of questions under oath.

They confirmed they understood the proceedings and were pleading guilty voluntarily.

The judge said: “The court will not determine today whether to accept this plea agreement which has a specific sentence attached with it.”

Later, assistant attorney general Alice Fisher, of the criminal division of the US Department of Justice, said the trio implemented a “secret and illegal” deal to yield “millions in profits for them personally at the expense of their employer”.

The trio admitted secretly investing with Andrew Fastow, Enron’s former chief financial officer, and Michael Kopper, Enron’s former managing director of global finance, in Southampton, LP.

Fastow created Southampton for the purpose of purchasing a unity called Swap Sub, which the three defendants were selling on behalf of NatWest.

“The three defendants concealed their scheme from NatWest through a series of financial transactions, including the use of options and off-shore entities,” a US Department of Justice spokesman said.

According to plea documents, in May 2000, within weeks of their investment, Bermingham, Darby and Mulgrew received around $7.3m (€4.9m) between them.

The three men pleaded guilty to wire fraud and admitted sending an email containing the final Swap Sub sale documents from London to Houston on March 17 2000.

They remain on bail of $4m (€2.7m) and are confined to a specific area of Texas.

Kenneth Kaiser, assistant director of the FBI’s criminal investigative division, said the guilty pleas showed “the extent of the fraud at Enron went well beyond US borders”.

He said: “The FBI remains committed to bringing to justice those responsible for corporate fraud, no matter where our search may lead.”

Kopper, Fastow and others received a total of approximately $12.3m (€8.3m) for their part in the scheme.

Kopper pleaded guilty to conspiracy and money laundering, and was sentenced to three years and one month in prison.

Fastow was sentenced to six years in prison after pleading guilty to conspiracy to commit securities and wire fraud.

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