PracticeAccounting FirmsFDs faced with threat of US extradition

FDs faced with threat of US extradition

FDs and board members could be extradited to the US to face fraud charges even if their company has only one shareholder in the States.

Finance directors, along with their fellow board members, could be extradited to face allegations of fraud even if their company only has a single shareholder in the US, a leading QC has warned.

Link: UK bankers face extradition over Enron charges

Alun Jones, the QC advising the three NatWest bankers facing extradition in connection with the Enron scandal, said the chances of an application based on just one shareholder had become a distinct reality.

‘A director of a publicly listed UK company could be extradited to the US to be tried for a fraud if his company’s allegedly inaccurate reports are published in a US newspaper to a solitary shareholder,’ Jones said.

‘Many UK companies still believe that they need a US listing or a large US shareholder base before they are subject to US laws such as Sarbanes-Oxley, but this is not the case.’

Jones made his comments during a conference last week on cross-border crime attended by top lawyers, policemen and academics.

Jones, who also advised on the extradition case of Augusto Pinochet to Spain, raised fears by revealing that even if a single email connected with an allegedly fraudulent scheme in the UK passed through a US-based internet service provider, it could provide legal authorities with enough evidence to launch an indictment followed by an extradition application.

‘A UK national may now be extradited to the US where he is accused of conduct which took place mostly in the UK – even where the UK authorities have declined to prosecute him. There are currently two such cases before the courts,’ Jones said.

Jones also believes UK nationals subject to extradition efforts no longer have an opportunity to defend themselves properly. He blamed a new treaty signed in March 2003, which removed the requirement for US authorities to present evidence when making an extradition request.

‘The allegation of fraud itself, however unfounded, is now sufficient for an extradition to be granted. Evidence of wrongdoing simply isn’t required,’ Jones said. He said that the only defence left against extradition could be the Human Rights Act, under which the courts may decide removal to another jurisdiction is unwarranted.

Earlier this month the three NatWest bankers, David Bermingham, Giles Darby and Gary Mulgrew, won the right to challenge their extradition to the US to face charges in connection with the fraud at Enron.

They argue they would not receive a fair trial and deny any wrongdoing. The bankers are seeking to challenge a decision by the Serious Fraud Office not to charge and try them in the UK.

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