Leeson Gets 6 1/2 Years for Sinking Barings : Crime: A judge says the former trader ‘spun a web of deceit’ in a scandal that caused the bank to lose $1.4 billion.

A court sentenced Nick Leeson today to 6 1/2 years in prison for illegally covering up his futures trading losses that grew to $1.4 billion and sank Barings.

Senior District Judge Richard Magnus said the 28-year-old Briton “spun a web of deceit” that was “deliberately designed to beguile” the Singapore International Monetary Exchange where he traded, and the auditors of Baring Futures, his employer.

Magnus said the sentence starts retroactively on March 2, 1995, the day Leeson flew to Germany from Singapore and Borneo and was jailed in a Frankfurt prison. That means Leeson’s sentence runs until September, 2001.

His lawyer, John Koh, said that Leeson’s time in prison could be cut by up to a third for good behavior. That means he could be released as early as July, 1999. Leeson has 10 days to appeal the sentence, but Koh would not say whether he would do so.

Leeson pleaded guilty Friday to two counts of cheating, reduced from 11 in a plea bargain with Singapore’s fraud squad, the Commercial Affairs Department.

Neither Koh nor the CAD has been willing to say what Leeson told investigators in questioning over the past week, but in a plea for leniency Friday Koh referred to other Barings executives’ knowledge and encouragement of Leeson’s disguising of his losses.

Echoing the report of Singapore inspectors in October to the Finance Ministry, Koh mentioned James Bax, who was managing director of Baring Futures, and Simon Jones, who was a director of Baring Futures.

The Commercial Affairs Department’s director, Lawrence Ang, has repeatedly said his agency will prosecute anyone who committed crimes in Singapore in connection with the Barings collapse or the cover-up of the losses.

Koh, a former officer of the fraud squad, would not comment on whether the agency will prosecute any former Barings executives.

Leeson is being returned today to the maximum-security Tanah Merah prison near Changi airport where he has been held since being extradited from Germany last on Nov. 23. Koh said he does not know where Leeson will serve his sentence.

Magnus sentenced the former futures trader to six years in prison for falsifying a payment slip last Feb. 2 to make Coopers & Lybrand, the auditors of Baring Futures, believe that $76 million had been paid into the company’s account by Spear, Leeds & Kellogg of New York.

That falsification was key to Leeson’s efforts to cover up the losses he incurred trading Nikkei 225 index futures, losses that multiplied when the Japanese stock market moved against Leeson and caused the fall of Barings last February. The British merchant bank has been taken over by ING Groep of the Netherlands.

The judge gave Leeson six months in prison on a second charge of cheating Simex by misreporting his futures positions last Feb. 1, getting the exchange to release $115 million in margin money to Baring Futures.

Leeson, in the dock wearing a dark suit and printed tie, looked straight at the judge and blinked when sentence was passed. He had no other visible reaction.