UK: UK Directors in the US Dock

Last Updated: 8 August 2006
Article by Francis Kean

The Extradition Act 2003 was introduced primarily as a counter-terrorism measure. That said, in respect of more than 40 applications for extradition that have been made since the Act came into force, over half relate to white collar crime.

Amongst these, there have been some high profile cases in which British nationals have been fighting attempts to extradite them to the United States. Examples include the NatWest 3, former executives of NatWest Bank who are accused of conspiring with Enron executives to defraud NatWest Bank of US$7.3 million and who have now been extradited. It is, however, the facts of a much less well known case involving Mr Nigel Potter, the former managing director of the UK leisure group, Wembley Plc which provide a more salutary illustration of quite how easily directors in this country can find themselves in serious trouble. In 2000 and 2001, Mr Potter was engaged in discussions with colleagues based in the United States in connection with a proposal for the licensing and introduction of additional gaming machines in Lincoln Park on Rhode Island. At one stage in these discussions, the general manager of Lincoln Park (a Mr Bucci) proposed that Wembley should pay a "bonus" to a third party to gain State approval for the installation of the new machines. Mr Potter neither approved nor sanctioned the proposed payment. Instead he said he would consider it with his board. Then, having consulted lawyers, auditors and Wembley’s board, Mr Potter decided not to proceed with the payment. In the event, the "bonus" was neither offered nor paid.

Mr Potter then heard that Federal Prosecutors in the United States were investigating the proposed payment as a conspiracy to pay a bribe and that the role of Mr Bucci and of Mr Potter himself in the affair were also under examination. In connection with these investigations, the United States applied for extradition of Mr Potter. They did so after the then Home Secretary David Blunkett had signed the Extradition Treaty with the United States on 31 March 2003. As a result, Mr Potter was advised that if he fought extradition, not only was he likely to fail but also he would be seen to have been unwilling to go to the US and would therefore have not been allowed bail in the UK pending his trial. In any event, he did not believe he had done anything wrong and decided to fly to the United States in order to cooperate with the US authorities.

In September 2003, he nevertheless found himself indicted on a number of counts and after two trials finishing in August 2005, he found himself convicted on three charges of wire-fraud. He is currently serving a three year prison sentence at Ellenwood Low Security Prison in Pennsylvania.1

The facts of Mr Potter’s case highlight a number of disturbing features which should be of general concern to any directors or officers who have dealings with the United States:

  • The Act applies to all requests for extradition from the United States made after 1 January 2004 irrespective of when the alleged criminal activity is said to have taken place.
  • Mr Potter was advised that his prospects of fighting extradition to the States were not good. Although we are not privy to any non-publicly available information in respect of the Potter case, we suspect that such advice may have been based on provisions of the Extradition Act which make it clear that any prosecuting authority seeking extradition does not have to establish a prima facie or good arguable case against a Defendant where such request emanates from the United States of America.2 Instead, it is sufficient if the relevant authority can produce hearsay evidence against the defendant. In other words, provided the authority can secure a statement from someone saying that in his or her view, based on allegations or evidence of others, some type of criminal activity occurred, that could well be sufficient to found a valid request.
  • The original intention behind the Treaty with the United States had always been that there be reciprocal arrangements with the United States under which the UK would be able to make similar requests of the US. In fact, the US Congress has so far expressly refused to ratify the Extradition Treaty on the basis that it does not contain adequate protection under the US Constitution for US citizens. It shows no sign of changing its position on this any time soon.
  • It should not be assumed that the Human Rights Act will afford any substantive protection against an Extradition Act request. It is true that a judge in dealing with an Extradition Act request must consider whether it is compatible with that person’s human rights. But the Act was unsuccessfully relied upon at first instance by Ian Norris, the former CEO of Morgan Crucible, another individual currently facing extradition to the United States in relation to alleged price fixing activities in respect of carbon products in the US.


The compass of the Extradition Act is extremely broad. It applies to any activity which is a crime both under English law and in the country in which a defendant has been indicted that is punishable in both countries by a sentence of at least 12 months. Thus it applies to any fraud related charges and to insider dealing, tax evasion, bribery and health and safety offences which lead to fatal accidents. Indeed, it covers the broad spectrum of corporate and commercial crimes of which directors may find themselves accused. The very low threshold which foreign prosecutors have to meet, coupled with the aggressive way in which the United States asserts jurisdiction in cases where the connection with the United States is very slight, should be of concern to all directors in the UK with business dealings with the United States.

Whether and to what extent a D&O liability insurance policy will provide sufficient legal defence costs protection in the event that extradition proceedings are instituted is something to which directors and their legal advisers would do well to turn their attention. A key question they will wish to consider is whether an extradition request constitutes a "claim" so as to trigger cover.


1 More information about Nigel Potter’s plight can be found at

2 It is not just requests for extradition to the USA to which these provisions apply. Other countries include Albania, Armenia, the Russian Federation, Serbia and Montenegro.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.