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Complaint Says Leeson Practiced Forging Wall Street Executive’s Signature

March 7, 1995

FRANKFURT, Germany (AP) _ A trader blamed in the collapse of Barings bank practiced signing the name of a Wall Street executive in order to commit forgery, Singapore authorities say.

Trader Nick Leeson, blamed for placing futures bets that bankrupted Barings at a cost of $1.4 billion, is in custody in Germany fighting extradition to Singapore to face forgery charges.

Leeson, 28, was detained March 2 at Frankfurt International Airport on a flight from Malaysia following the collapse of Baring Brothers and Co. The British investment bank has since been bought by the Dutch financial institution ING Group.

The Singapore complaint accuses Leeson of forging two documents. One showed that Barings Futures received $74 million from one of Wall Street’s biggest trading firms, and the other said the money was in Barings’ account.

Frankfurt prosecutor Hans-Hermann Eckert showed the complaint to reporters Tuesday.

One allegedly forged documents, Singapore authorities said, is a letter purporting to be from the New York trading firm Spear Leeds and Kellogg, confirming it was paying for a trading contract.

The other allegedly forged document was said to be a confirmation by Citibank in Singapore that Barings Futures had the money.

``It is established from Citibank officers that the Citibank payment in confirmation summary dated 2 Feb. 1995 had definitely been forged,″ said the complaint, sent with an arrest warrant issued by Singapore court Judge Chew Siong Tai David.

The Singapore complaint also said ``Barings officials found documents in the office of Nick which showed that the confirmation allegedly sent by Spear Leeds and Kellogg was manufactured in Nick’s office.

``He had apparently been practicing the signature of Richard Hogan, the managing director of Spear Leeds and Kellogg.″

Hogan, contacted Monday in New York, declined comment.

The complaint then says Leeson gave the allegedly forged documents to Rachel Yong, an officer of Barings in Singapore, ``who subsequently handed them to the auditors, Coopers and Lybrand on 3 Feb. 1995, for the purpose of obtaining provisional audit clearance of Barings Futures’ financial statement for the year ended 31 Dec. 1994.″

Eckert said it was impossible to tell from the copies that he had whether Hogan’s signature was forged.

``One has to see the original and that is in Singapore,″ he said.

Singaporean authorities have until May 2 to provide documentation of their charge that Leeson committed ``forgery with intent to commit fraud.″ They then they must persuade a court, and the German federal government, to honor their extradition request.

Eckert said ``falsification of documents″ is an extraditable offense in Germany and carries a maximum five-year prison sentence. It’s a maximum seven-year sentence in Singapore.

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