When the FBI Comes Calling…®

July 15, 2005

Law Being Used Against Businessmen

The Associated Press

When Britain signed a treaty with the U.S. in 2003 that drastically reduced the evidence required from U.S. officials seeking to extradite suspected felons, the British government said it was all about speeding up the process of bringing terrorists to justice.

What few expected to see was U.S. authorities using the law to pursue senior executives - whose alleged offenses either took place mostly in Britain or were not even crimes here - alongside of the likes of Abu Hamza al-Masri, the hook-handed preacher wanted on terrorism charges.

Yet that is what has happened to three NatWest bankers - David Bermingham, Gary Mulgrew and Giles Derby - who are facing charges in an 11 million pound (US$19.4 million; euro16.17 million) fraud case arising from the Enron Corp. collapse, and to Ian Norris, the former chief executive of investment firm Morgan Crucible, who faces price-fixing charges.

Legal experts have cried foul because the treaty is not reciprocal: The U.S. Senate has not yet ratified the treaty, meaning that British officials still must meet a higher burden of evidence when seeking to have suspected criminals brought here for justice.

While the United States has signed the treaty, it has not been considered by the Senate as organizations such as the American Civil Liberties Union lobby against it.

"The fact is that all these procedures have been curtailed in the name of the war on terror, but it isn't terrorists who are facing the consequences," said Jason Mansell, a London extradition lawyer.

The Home Office said the United States has requested the extradition of 45 people under the law since it came into force into January 2004, and acknowledged that just three of those cases were related to terrorism. Some 22 cases were connected to fraud or theft-related white-collar offenses, with others ranging from sexual offenses to murder.

Douglas McNabb, a Texas-based criminal defense lawyer who testified as an expert witness on the U.S. legal system at the Bermingham trial, is so convinced that the cases signal "an escalating global U.S. federal criminal prosecution approach" that he is setting up shop in London to provide advice for the rash of cases he expects to follow.

"I think we are going to see more and more of these," McNabb said on a recent reconnaissance trip to London to find office space. "I think people in London are starting to become more worried and these cases shocked them. I don't think that anyone really understood the full implications of this act."

The financial district, and some lawmakers, are beginning to wake up.

Boris Johnson, a lawmaker for the opposition Conservative Party, has put forth a parliamentary petition calling for Britain to refuse to extradite anyone under the new laws and amend them to require that more evidence be presented by the United States. The motion, which has no bearing on government policy but is a gauge of sentiment among lawmakers, has so far garnered 73 signatures.

"It is an absolute disgrace that these men may now be carted off to some Texas jail without even the protection of a preliminary hearing in this country," Johnson said, referring to the NatWest bankers known as the Bermingham Three. "We are not talking about international terrorists here, but British businessmen accused of defrauding a British firm. Regardless of the rights or wrongs of their case I believe those rights and wrongs should be established in a British court of justice."

Law experts said the cases show that only a tenuous link to the United States is needed to pursue such cases - the fast-track process that the new law allowed for means U.S. officials can apply for extradition on hearsay evidence, without a prima facie case against the defendant first having to be made on his home territory.

Experts point out that Britain's business sector is particularly vulnerable because of its international nature and of the vast amount of work it does that involves some contact with the United States.

"Even if all of the conduct in an alleged fraud has taken place outside of the U.S., if one telephone call is made to the U.S. or an e-mail is sent which is routed via the U.S., then the U.S. can indict a person for the U.S. offense of wire fraud," said extradition lawyer Anand Doobay. "The U.S. has an aggressive jurisdictional reach ... and is increasingly willing to exercise it."

Legal experts believe the cases of Norris and the NatWest bankers will be tests of how far the United States can stretch that reach.

There are questions about the legitimacy of pursuing the cases: Nearly all the offenses allegedly committed by the Bermingham Three took place in Britain, and British authorities have shown no appetite for prosecuting them. Norris is being prosecuted for a crime that didn't exist in Britain at the time - price-fixing or cartel activity did not become illegal until 2003 and the charges relate to the 1990s.

Norris, who has not denied being involved in colluding over the price of carbon brushes in the United States and Europe, set an appeal in motion after a British judge ordered that he be delivered to the U.S. Justice Department. Norris is also applying for a judicial review of the legality of the process.

The Bermingham Three are taking the extraordinary step of demanding a judicial review of the failure of the U.K. Serious Fraud Office to put them on trial in Britain in order to avoid their deportation, which has been ordered by Home Secretary Charles Clarke.

The High Court approved their bid for that review last week, and if that fails they will be allowed to appeal Clarke's ruling.

Human rights organization Liberty claims the law could breach international human rights rules.

"It's quite clear to see that it could disrupt your family life if you have to be extradited to the other side of the world," said Doug Jewell, campaigns coordinator for Liberty. "You have to wait a time to be put on trial ... you are very likely to be held on remand, rather than on bail, and essentially people are not sacks of potatoes to be moved around here, there and everywhere."


This article can also be found at Forbes, Yahoo Finance, and MSM Money.