finance

White-collar crime: life after release


“These are the concrete cows,” David Bermingham says as we ascend a metal ladder beside a huge corrugated metal cylinder. At the top he removes a plastic covering from a porthole. “Give your eyes five seconds to adjust,” he advises. Inside, a dark lumpy liquid swirls around, sending bubbles up to the surface.

It is one of two biodigesters on this biomethane gas farm. Bermingham, 59, who lives nearby, set up the anaerobic digestion plant with a local farmer and investors. Each year the plant, which is tucked away in rolling arable fields and hidden by trees, produces enough gas to heat and provide cooking gas for 5,000 homes.

Bermingham was not always a green entrepreneur. In a former life he was one of the so-called “NatWest Three” bankers, employed by the high street lender’s corporate bank, whom the US Justice Department extradited from Britain in July 2006 to face trial over a complex offshore financing scheme linked to collapsed US energy company Enron.

The trio spent more than five years in the UK and US fighting the case and denying they had done anything wrong. Their case became a cause célèbre, highlighting issues with the 2003 Extradition Act, which critics said was unfairly weighted in favour of the US and where, in their view, the criminal justice system put undue pressure on defendants to plead guilty.

In November 2007 the NatWest Three agreed to a plea bargain, admitting one count of wire fraud. They were jailed for 37 months, initially in the US, before serving out the rest of their sentences in the UK.

After finishing probation in 2010, Bermingham, then 48, began looking for “something to do for the rest of my life”. He says he was lucky in having supportive friends, family and ex-colleagues. “I never had the fear of putting my head above the parapet.”

He wrote A Price to Pay, a book about his US extradition experience and did some public speaking. He also did finance work, such as designing investment funds for renewable energy, before setting up the biomethane plant — among the first of its kind in Britain.

Bermingham’s experience shows how those who have served time for white-collar crimes can get back on their feet. He is one of a number of ex-bankers, including Nick Leeson, Tom Hayes and Giles Darby, who have found employment after release. But for former offenders — white-collar ones included — the path to rehabilitation is seldom straightforward.

Those convicted of a criminal offence often face problems accessing financial services including bank accounts, finding work or obtaining a visa to travel overseas. Bankruptcy is common, potential employers are wary, relationships can come under strain and finances may remain tight for years after release.

Understanding the challenges they face — and in some cases overcome — may be helpful to those who experience other kinds of life-changing events such as bankruptcy or a bitter legal battle. For Bermingham, a “positive mindset” was vital. “Worse things happen to people. What happened to us was a bump in the road and if that is the worst thing that ever happens to me, I’m blessed.”

White-collar crime is never victimless. Corporate frauds such as Enron or WorldCom can lead thousands of people to lose their pensions, life savings or jobs. Tax and welfare frauds deprive the public finances of vital cash. But Britain’s penal system expects those who have served their time to make their way back to ordinary life — and academics and charity workers say newly-released prisoners face a range of barriers to that transition. FT Money looks at what comes next for these individuals, including some of the City’s past offenders.

Chris Atkins served two and a half years in prison for fraud over an illegal film finance scheme © Charlie Bibby/FT

The white-collar club

Chris Atkins is a boyish-looking Bafta-nominated film-maker who rarely sits still and gestures wildly when making a point. He studied physics at Oxford university and embarked on a career filming documentaries before he was jailed for five years for fraud in 2016 over an illegal film finance scheme.

Atkins, 45, who served two and a half years in prison, used his sharp filmmaker’s eye to detail his experience in Wandsworth prison in his book A Bit of a Stretch: The Diaries of a Prisoner. He is now writing a TV drama series about the prison system.

“People talk about prisons like they are holiday camps,” Atkins says, speaking to the FT over a cup of coffee in London’s plush Belsize Park. “I was watching teenagers swallow razor blades and it was quite different.”

During his stretch at Wandsworth, he ended up in a comfortable cell in “H” wing, nicknamed the “White-Collar Club” because of the preponderance of former City bankers among its residents. He says he became friends with Martyn Dodgson, a former Deutsche Bank employee convicted of insider trading. Each day they did crosswords and listened to Classic FM to drown out the mayhem outside.

He saw violence, in particular on so-called “Black Eye Fridays” when items such as chocolate and coffee were delivered to prisoners and any debts between them had to be settled. “That’s when the violence happens and they can’t pay their debts and get thumped . . . I never borrowed tobacco off anyone for good reason,” he says.

Atkins describes himself as “basically a film-maker who grifted the wrong pot” and says he regrets his past actions. He also rues the impact of time spent away from his young child. “That to me is the biggest regret. The taxman got his money back but my son will never get those two years back.”

But he was surprised by the positive reaction he found upon release. “I was overwhelmed with how forgiving people were. I thought no one would want to work with me again but people go — ‘It was really stupid, it was wrong and you’ve admitted it’.”

Those who have served time for white-collar offences are seen as being at low risk of reoffending but often find it tough to start over, as many would-be employers are cautious.

Unlock, a charity which supports people with criminal records, says 11m people in the UK have a criminal record and 75 per cent of employers admit discriminating against such applicants. Former white-collar professionals are usually barred from returning to work as a company director or in the City by financial regulators such as the Financial Conduct Authority.

Debbie Sadler, advice manager at Unlock, says: “Mr Joe Average may be unable to work in the field they are trained in, so it’s harder to earn a living than if they had a trade and could be self-employed.”

Atkins argues that those who have served time for white-collar crimes will often be in a better position on release than other former offenders, such as those who have been released without family support or with mental health issues and drug problems.

“All the bankers that I know came out and they had a bed that night,” he says. “While they went down, their mates are still running Fortune 500 companies. They are not going to be managing funds again but they are not going to be starving.” He recalls one former inmate and software expert who was actually offered a £150,000 job on his release.

But evidence cited by Mark Button, a professor at the Institute of Criminal Justice Studies at Portsmouth University, suggests such fortunate cases are the exception. He and colleagues undertook a study into 17 white-collar ex-offenders after release. Although some experienced a limited impact, many saw a decline in status, financial losses, negative media coverage as well as relationship breakdown and mental health issues. Of 13 mid-career individuals, eight had to sell their homes, seven took jobs at lower salaries and two could find no work.

One interviewee went from a wealthy lifestyle to living in rented accommodation and working self-employed as a driver. Another was left with nothing after having a multimillion pound property portfolio repossessed by the banks. Seven of the 13 interviewees suffered mental health issues requiring treatment and one attempted suicide. Simon, a man from Wales cited in the study, was verbally attacked by strangers in local supermarkets, suffered a breakdown and was hospitalised.

“A number of offenders offend through the position they were in and if they are not in that position any more their chances of offending are quite low,” says Button. “A lot of them have skills and professional skills which lead them in the wrong way and talent should not be wasted. I think definitely after a suitable point they should be given new chances to do things.”

The ‘NatWest Three’, Gary Mulgrew, left, David Bermingham, centre, and Giles Darby outside a US court in 2006. They later spent time in US and UK jails © Richard Carson/Reuters

Recasting a life

Several of the best-known white-collar offenders have reinvented themselves after release. Nick Leeson spent four years in prison after bringing down Barings Bank in 1995 in a £830m rogue trading loss. After getting out, he penned a bestselling autobiography, which was made into a movie. He managed the affairs of Galway United Football Club as well as becoming an after-dinner speaker and trading coach, and appeared on Celebrity Big Brother, the reality TV programme, in 2018.

Tom Hayes, the former Citigroup trader convicted of a conspiracy to rig the Libor benchmark, was released from prison in January. He is now a consultant at Red Mist, a corporate intelligence agency, and is challenging his conviction.

Like Bermingham, Giles Darby was one of the NatWest Three bankers. Darby joined NatWest as an 18-year-old trainee in Trowbridge, Wiltshire, before moving into the City and a 20-year career flying around the world putting deals together. He had all the trappings of success, with homes in the New Forest and Hertfordshire and a good expense account.

In his own book, Inside Allenwood: The Story of a British Banker Inside a US Prison, Darby paints a vivid picture of a brutal penal system. He saw one prisoner almost beaten to death in the TV room by a group of Columbians and recounts sharing a cell with El, the illicit prison bookie who took bets placed with tins of fish. He recalls a conversation in the microwave room with Mafia mobster John Carneglia, in which Carneglia asked about the best route for his son to apply for jobs at Wall Street investment banks.

“[Violence] just flares out of nothing and it’s menacing violence as well real proper violence. You almost can’t believe the ferocity of it,” he says.

A father of five daughters, Darby says he relied on his friends and family to help him rebuild his life. “There were people that were prepared to help and support me and get back on my feet so I was lucky in that respect.” he says, speaking to the FT in the café of a garden centre in Wiltshire, where he lives.

After his release, a former business partner bought him out of a manufacturing business they had co-owned and he became involved in a friend’s pub company before striking out with other investors to set up another venture in the same sector, the Red Dragon Pub Company. It has now opened 16 sites along the M4 corridor in south Wales.

Financial barriers

In Button’s study, some of his subjects were made bankrupt, some saw their bank accounts closed and others struggled to get insurance for the house or car. Many struggled to access financial products which rely on credit ratings. Others lost volunteering jobs with charities or could not keep their marriages together.

One interviewee told the study: “[Prison] was bad enough. The penalty was not being able to get any insurance for anything . . . [and] having my bank accounts closed. I’ve got house insurance but instead of paying £300 . . . I’m paying nearly £2,000.

Atkins, the film-maker, was served with a confiscation order of £100,000 plus another £109,000 for prosecution costs by the courts under the Proceeds of Crime Act, a law which is intended to deprive the defendant of any benefit they have obtained from crime. “I got hit with confiscation so . . . I had to sell my house to settle that.”

Bettina Jordan-Barber, senior consultant at Prison Consultants, a group which advises people on what to expect if they receive a prison sentence, says banks can close a person’s accounts at any point and give them six weeks notice to move them.

“Insurance is a massive problem, even car insurance,” she says. “Buildings and contents insurance is another one. You have to notify insurers about a change of status and a conviction can be regarded as this. You don’t even have to be the policyholder — it can be anyone living at that address.”

Travel to the US is usually blocked because criminal convictions have to be declared on a US travel visa application. And, under British law, foreign nationals who have been given a custodial sentence may face automatic deportation unless they can provide compelling reasons why they should stay.

Kweku Adoboli was convicted of fraud in 2012 over a $2.3bn unauthorised trading loss at Swiss bank UBS and released in 2015. Having not applied for British citizenship, he was eventually deported from the UK in 2018 to his native Ghana after losing a legal fight with the Home Office. He is now an adviser on culture and systems in the finance industry and a public speaker.

Wandsworth Prison, where Chris Atkins, Martyn Dodgson and Matthew Uberoi all served time © Graeme Robertson /Eyevine

Seeking a brighter future

Matthew Uberoi was a 21-year-old business studies undergraduate on work experience at corporate broking firm Hoare Govett in 2006 when he passed information on three stocks to his late dentist father, using a code about Chinese takeaway food. He was found guilty of 12 counts of insider dealing and handed a prison sentence in 2009.

Sipping a drink in a bar near London’s Victoria Station, Uberoi, now 36, cuts a different figure to the young graduate who spent three months in institutions including Wandsworth and Ford open prison. He is now married with a young child and is a community worker in west London — as well as a Labour councillor.

At the time of his sentencing, Uberoi says many people assumed his life was over. “What I did was wrong . . . I would never minimise what I did,” he says. But far from breaking him, he says the experience of conviction and prison “had a profound impact on me but for the best. I’m a much better person for it and it really did give me a drive to do things differently in my life.”

After his release he threw himself into community work. He is a trustee of a grant-giving body Dr Edwards & Bishop King’s Fulham Charity and a past trustee and director of the Hammersmith and Fulham law centre. When he met the woman who was to become his wife — a lawyer — he told her about his past. “She was very supportive,” he says.

He is aiming to set up a charity next year called Our Second Chance, which will help promote the UK’s Rehabilitation of Offenders Act. This legislation — already in force — allows many convictions to become “spent” after a certain period, meaning they need not be disclosed to an employer.

“It’s incredibly powerful knowing after a certain period of time your slate is wiped clean — provided you have done what you are expected to do, which is not to offend again,” he says.

Those who make a mistake early on in their life should not be defined by it, he adds. “It’s a chapter in your life . . . one that should give you strength if you learn from it and use it wisely.”



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