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By Andy McCue, 22 November 2006 12:55

NEWS

UK tech executives working for US-headquartered companies risk jail time in the States over accounting irregularities and fraud allegations because of the UK's "disgraceful" extradition law.

The UK's extradition agreement with the US has come under fire from businesses following the recent high-profile cases of the NatWest Three and former Peregrine Systems European boss Jeremy Crook.

Under the UK's current law the US can request the extradition of a criminal suspect by getting a Grand Jury indictment - most of which are held in secret - without the need to present any of the evidence in a UK court first.

The suspect must then stay in the US until the trial is heard - bail requests are usually refused - at their own expense and with no legal recourse should they be found not guilty or the charges later dropped.

Charlotta Blomberg, legal advisor on company affairs at the Confederation of British Industry (CBI), hit out at the extradition treaty with the US.

She told silicon.com: "It's a real risk to anyone working in any company with US connections. The first thing people will know about it is when they get the knock on the door but unfortunately that's a position the UK government is happy to retain."

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The CBI maintains it is not looking to hinder extradition for "white collar" business crimes but said the current law is unfair and leaves the extradited individual damaged professionally and personally, and unable to earn a living.

As most extradition requests are made on a dual-criminality basis - i.e. that the crime has been committed in the UK and the US - the CBI wants the law to be changed so that the UK element of the charges could be tried in UK courts first, with a not guilty verdict barring extradition on the other charges on the basis of the double jeopardy principle.

Extradited suspects also face what the CBI calls "invidious" use of plea-bargaining agreements in the US where the choice is between entering a guilty plea which might require a few years in a US jail or risk fighting the case, losing and facing the rest of their life behind bars.

The CBI also wants extradition targets to be able to remain in the UK on bail to conduct their defence and carry on earning a living, and a guarantee that any US sentences run concurrently and not consecutively.

In Crook's case he is charged, along with other Peregrine executives, of conspiring in an accounting fraud and attempted cover-up that led to the software company filing for bankruptcy protection, which wiped $4bn off its share value.

Following his extradition in September, Crook is now based in San Diego and his trial has been adjourned until the middle of 2008 although there will be a bail hearing early next month to decide if he can return to the UK for Christmas.

Crook's UK lawyer Steve Law told silicon.com: "They are trying to say that even though he was not aware of revenue booked in the States it was reckless for him not to know about it."

On similar charges in the UK Crook would be looking at a maximum of five years in jail if found guilty. In the US he could get more than 70 years. He denies all the charges.

Law said: "It's a disgraceful piece of legislation. It's absolutely shocking and he is likely to be there for two years, all at his own expense and with no recourse. It is really quite shocking they can do that."

But he warned that other UK and European executives face the same treatment if their mother companies are in the US and the accounts filed there.

He said: "Someone who is a VP - not even a director - who signs off things that are dealt with in America, they can be extradited. All the prosecutors need is a Grand Jury indictment."

Intellect, the trade group representing UK IT companies, declined to comment for this report.