NatWest 3: One Down, Two to Go

A federal judge in Houston today sentenced one of the so-called NatWest 3 bankers to a little more than three years in prison for his role in helping former Enron finance chief Andrew Fastow execute one of the many frauds that led to that company's collapse.

District Judge Ewing Werlein Jr. sentenced David Bermingham, 45, to 37 months in prison, in line with the punishment federal prosecutors had recommended.

The other men, Gary Steven Mulgrew, 46, and Giles Robert Hugh Darby, 45, are scheduled to be sentenced this afternoon. They could be sent to jail for as long as five years and fined as much as $250,000 each.

All three men pleaded guilty to a single count of wire fraud as part of a plea agreement with authorities. Their lawyers have said the men will petition to serve all or part of their sentences in England. They've also agreed to pay more than $7 million to their former employer.

While working at Greenwich NatWest, a unit of Royal Bank of Scotland Group, the men were assigned to sell one of their employer's investments with Enron, prosecutors said.

They advised NatWest to sell the investment for $1 million to Southampton LP — an entity they secretly owned along with Fastow and his former deputy, Michael Kopper. Within weeks, Southampton resold the investment for $20 million, and the Southampton partners shared in the profit.

For their $250,000 investment in Southampton, the three defendants received a total of $7.3 million, or $2.83 million each, prosecutors said. Kopper, Fastow and others received about $12.3 million. The three NatWest bankers hid their participation from their employer throughout.

by Mark Stein