To hear U.S. prosecutors talk, you'd think Ian Norris was a terrorist. But the

62-year-old Norris, a U.K. citizen and resident, is anything but. Norris is the retired CEO of The Morgan Crucible Co., a British manufacturer of carbon products.

The U.S. is seeking to extradite Norris for allegedly conspiring to fix the price of carbon products in the U.S. between 1989 and 2000. The alleged crime wasn't even a criminal offense in Britain until June 2003. In addition, it was committed primarily in the U.K. This has many lawyers both in the U.S. and Britain concerned.

“If Norris is extradited, he'll be handcuffed, shackled, denied bail, detained in a high-security facility for up to a year awaiting trial, have limited access to a lawyer and the documents he needs for his defense, and be facing a sentence of 20 to 25 years in a federal facility without hope of parole,” says Douglas McNabb, senior principal of the Washington, D.C.-based global criminal defense firm McNabb Associates.

What makes Norris' extradition possible is the U.K.'s 2003 Extradition Act, which came into force January 2004. The legislation ratified a treaty between the U.S. and the U.K. to fast track the extradition of suspected terrorists.

The U.S. has yet to ratify the treaty, but that hasn't stopped American authorities from trying to use it. So far the U.S. government has submitted 45 extradition applications, half of which relate to white-collar crime. And of the nine applications granted, none has involved an alleged terrorist.

“The treaty is being used in ways that the U.S. government promised it would not be used,” says Larry Byrne, a former Justice Department prosecutor and now a partner with White & Case in New York, where he is working on the team fighting Norris' extradition.

This state of affairs has created an uproar in Britain.

“The Extradition Act has given the American criminal justice system such enormous extraterritorial power that no English executive with subsidiaries in the U.S. is safe,” says Alun Jones, the London barrister who is Norris' counsel.

No one is more aware of that than Norris.

Bad Behavior

The U.S. government began investigating price-fixing allegations in the carbon industry in April 1999. Prosecutors allege Morgan and other European producers of carbon products conspired to fix prices in a number of countries, including the U.S. Among the alleged conspirators were two Morgan subsidiaries: North Carolina-based Morganite Inc. and Pennsylvania-based Morgan Advanced Materials & Technology Inc.

According to prosecutors, the conspiracy operated through various committees that met to coordinate cartel activity. Norris, who had been at Morgan since 1969, was a member of the high-level “Summit Committee,” from 1989 until 1998.

As part of a plea bargain in November 2002, Morgan Crucible and Morganite pleaded guilty to various counts of price-fixing and paid $11 million in fines. The plea bargain gave most of Morgan's officers, directors and employees immunity from prosecution, but withheld protection from Norris and three others.

A year later, prosecutors indicted Norris on seven counts of price-fixing. The U.S. made its extradition request in December 2004, and British officials arrested him the following month.

The key figures in the extradition process are a U.K. district judge and Home Secretary Charles Clarke. The district judge's role is to determine whether the individual is extraditable. If he rules in the prosecution's favor, he must refer the case to the Home Secretary, who makes the final decision. However, Clarke cannot refuse to extradite except in limited circumstances, such as where the offense carries the death penalty.

As it turns out, the outcome of the district court hearing, which took place in mid-May, was all but pre-ordained.

Double Standards

Under the previous treaty between the U.S. and Britain–and in the vast majority of extradition treaties–the country seeking extradition had to establish that it had a prima facie case against the defendant. Not so in the case of the 2003 Extradition Act. Now the U.S. must prove only that the defendant has been indicted for a crime that is punishable in both countries by a sentence of at least 12 months.

“In other words, mere allegations are sufficient for extradition without any evidence of wrongdoing at all,” Jones says.

Remarkably, when Britain seeks to extradite a U.S. businessman, it must meet the prima facie case threshold–a lack of reciprocity that galls the British even more.

“This treaty is outrageous and totalitarian,” says Professor Francis A. Boyle of the University of Illinois College of Law, who is spearheading the opposition before the Senate's Foreign Relations Committee. “We're geared up to defeat this legislation.”

Which, according to Byrne, is a real possibility. “There doesn't seem to be any sentiment for ratifying the treaty,” he says.

Aggravating the disparity is the fact that the Extradition Act applies retroactively. So even though Norris' alleged behavior didn't constitute a crime in Britain when it took place, the fact that it was a crime under U.K. law as it stood at the time of hearing subjected him to extradition.

It came as no surprise then that in early June District Judge Nicholas Evans referred Norris' case for extradition to Clarke. He had until August to decide whether to confirm the extradition. But his decision in late May to extradite the “NatWest Three” for an Enron-related fraud (see sidebar) this past October, suggests Clarke will send Norris packing.

And if Norris is forced to cross the Atlantic against his will, chances are that others will soon follow.

More To Come

“If the Norris and NatWest extraditions are allowed, you will see the U.S. attempting to enforce U.S. law abroad even when the defendant's connection to America is remote and even where the conduct occurs only tangentially in the U.S.,” warns Michael Sanders, a competition law partner at Linklaters' London office who has been following the cases closely.

Jones concurs. The fallout from these cases is so draconian, he says, that even a single e-mail connected to an allegedly fraudulent scheme in Britain could provide a legal basis for an extradition request by the U.S. if the e-mail passed through a U.S.-based ISP. Jones also says a director of a U.K. company could be extradited to the U.S. for filing inaccurate financial statements even if only one shareholder among millions lived in the U.S.

Indeed, there are no indications that the Justice Department will let up on its extradition quest. To the contrary, Scott Hammond, deputy assistant attorney general for Criminal Enforcement of the Antitrust Division of the U.S. Justice Department, who spoke on a panel at the 2005 Annual National Institute on White Collar Crime in Las Vegas in March, cited the efforts to extradite Norris as one of two recent “blockbuster developments” in antitrust enforcement.

If Hammond is right, the aggressive criminalization of business regulation in the U.S. that followed the Enron and WorldCom collapses has infiltrated Britain, a country that is historically much more sanguine about white-collar crime.

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[SIDEBAR]

At A Glance: The NatWest Three

The first case involving the 2003 Extradition Act to receive wide publicity involved the “NatWest Three.”

David Bermingham, Gary Mulgrew and Giles Derby were formerly executives at NatWest Bank, one of Britain's largest banks. American prosecutors in Texas accused them in 2002 of conspiring with Enron's former CFO, Andrew Fastow, and his associate, Michael Cooper, to defraud NatWest of $7.3 million.

The U.S. government claims the three helped Fastow and Cooper sell part of an Enron-owned company in the Cayman Islands for considerably less than it was worth. The bankers then left NatWest, bought into the firm, and sold it for a huge profit.

Bermingham, Mulgrew and Derby are all British nationals who reside in the U.K. They all maintain their innocence, and British authorities have refused to prosecute them even though the alleged victim is a British financial institution–which is still lending the defendants money for legal costs.

While fraud is a recognized offense in Britain, the U.S. government resorted to the 2003 Extradition Act even though the offenses occurred before the Act's passage. This relieved American prosecutors of having to prove a prima facie case.

In October 2003, Judge Nicholas Evans of the District Court–the same judge who later heard the Norris case–ruled that the British government could extradite the three and referred the matter to the Home Secretary, Charles Clarke, for a final decision.

In May, just a week before Evans released his decision in Norris, Clarke ordered their extradition. He's the same man who will decide Norris' fate.

Lawyers for the NatWest Three said they would appeal the case all the way to the European Court of Justice.