Three plead guilty in Enron case

Three British bankers who were set to go to trial for their roles in a fraudulent scheme with former Enron Corp. Chief Financial Officer Andrew S. Fastow changed their pleas to guilty Wednesday.

David Bermingham, Giles Darby and Gary Mulgrew originally pleaded not guilty to seven counts of wire fraud. Prosecutors alleged that they colluded with Fastow in a secret financial scam in 2000 to enrich themselves at their employers’ expense.

They were set to go on trial in January, but each pleaded guilty to one count of wire fraud in a hearing before U.S. District Judge Ewing Werlein Jr.

The three former executives at Greenwich NatWest, a unit of Royal Bank of Scotland Group, became a cause celebre in Britain throughout extradition proceedings that lasted two years.

In the United States, their case is a loose end of an investigation launched after Enron’s 2001 collapse. Charges initially filed against them in 2002 alerted Fastow that he was a target of the government’s investigation into Enron’s downfall.

The indictment against the bankers -- dubbed the NatWest Three -- alleged that they came to Houston in 2000 to concoct a fraudulent scheme with Fastow and his former top aide, Michael J. Kopper.

Greenwich NatWest had invested in a subsidiary of an Enron partnership controlled by Fastow, who was the architect of myriad fraudulent Enron schemes that helped fuel its spiral into bankruptcy.

In early 2002, the bank had valued its interest in the subsidiary at zero, but the three British men knew it actually had significant value.

A company under Kopper’s control purchased the bank’s interest in the subsidiary for $1 million. The bankers paid Kopper $250,000 for an interest in this company. According to the indictment, Fastow falsely represented to Enron that the energy company would pay $20 million to Greenwich NatWest for its shares of the subsidiary.

But the $20 million actually went to the British bankers, Fastow and others. The bankers received $7.3 million while Fastow, Kopper and others skimmed about $12.3 million, according to the indictment.

In January 2004, Fastow pleaded guilty to two counts of conspiracy for his role in Enron’s collapse. The British trio was arrested three months later.

Fastow is serving a six-year sentence in a federal prison in Louisiana. Kopper is serving a three-year, one-month sentence at a facility in Texarkana, Texas.

The three British men have been free on $1-million bail that required them to live in the U.S. pending trial.