THREE British bankers fighting extradition to America are the victims of flawed decisions by the police and the Serious Fraud Office (SFO), the High Court heard yesterday.

Alun Jones QC, for the bankers, said that the SFO and City of London police had decided not to investigate the men because they had misunderstood American prosecutors and believed that the men had been accused of conspiring to defraud Enron. In fact the US prosecutors’ case centred on a conspiracy to defraud NatWest, Mr Jones said.

Authorities in the United States want to try Giles Darby, David Bermingham and Gary Mulgrew in Houston, Texas, where they face charges of conspiring to defraud NatWest of more than $7 million (£4 million) over the sale of an offshore entity to Enron.

The men, who deny the charges, say that they should be tried in Britain because extradition would violate their rights as “Englishmen” and NatWest, a British business, was the alleged victim.

NatWest, now owned by Royal Bank of Scotland, has not been involved in the case or sought any compensation.

The three men are seeking a court ruling to force the SFO to launch an investigation. The decision is expected to help to clarify how the SFO and the Crown Prosecution Service handle cases involving cross-border crime.

Mr Jones said that the SFO had a duty to investigate cross-border crime that affects English companies. He gave warning of danger in allowing American authorities to handle prosecutions affecting City institutions.

“There is an acute danger that financial cases obviously concerning the City of London and UK financial institutions are simply going to be sub- contracted out to the US to prosecute on the grounds that they got in first,” Mr Jones said.

The men are being sought under a treaty intended to expedite the extradition of terrorist suspects for trial in the United States. Controversially, America has used the fast-track procedure against British businessmen, although there are no reciprocal arrangements.

This month the Court of Appeal will hear a separate challenge by the three men to a decision by the Home Secretary allowing their extradition to the US.

Mr Jones said that the three bankers, if extradited, would probably be denied bail and be held in a maximum security prison in Houston for up to two years before trial.

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