Lawyers spar in 2 British ex-bankers' interest rates trial

NEW YORK (AP) - Two British ex-bankers "left a paper trail a mile long" as they tried to manipulate worldwide interest rates to benefit themselves, a prosecutor told jurors during closing arguments at a federal trial Tuesday. But defense lawyers said the case lacks proof and insisted their clients are not guilty.

The arguments came in the Manhattan trial of Anthony Allen, 44, and Anthony Conti, 46, two former bankers for the Dutch bank Rabobank, one of the world's largest financial institutions.

Rabobank of the Netherlands agreed two years ago to pay about $1 billion to settle U.S., British and Dutch charges of manipulating the key global interest rate. The payout included a $325 million deal with the U.S. Justice Department to allow the bank to avoid criminal prosecution in exchange for cooperation.

Allen and Conti are charged with conspiracy and wire fraud, accused of abusing their positions to influence the daily benchmarks of the London Interbank Offered Rate, or LIBOR, a measurement of London-based interbank interest rates that influence interest rates worldwide.

The U.S. Justice Department claims the men conspired with other bank employees from 2005 to 2011 to falsely report their bank's cost of borrowing from other banks in London so that Rabobank and some of its workers could gain an advantage in the financial markets.

Prosecutor Brian Young showed jurors various emails written by co-workers to persuade Allen and Conti to manipulate interest rates, saying the correspondence and Allen's and Conti's responses were "rock solid evidence of collusion and conspiracy and there is no way out from under it."

To ignore that evidence, he said, "You would have to believe that time and time again the defendants did not mean what they said."

He added: "In doing the scam, the defendants left a paper trail a mile long."

Michael Schachter, Allen's lawyer, encouraged jurors to study the evidence and said they would find Allen "did not conspire to commit fraud or engage in a scheme to commit fraud."

"This is the kind of case that the more you look, the more you dig in, the more the prosecution's case falls apart," he said. "The pieces here don't fit together because Tony Allen is not guilty."

Aaron Williamson, Conti's lawyer, said his client approached his task of estimating the rates Rabobank would pay to borrow from other banks with humility, setting a range that would be accurate before choosing a number based on multiple considerations, including the trading positions of bank employees.

Still, he said, "Tony never let a trader's request influence him to make a fraudulent LIBOR submission."

Rabobank is one of 16 banks that contribute interest rate information that influences trillions of dollars in contracts around the world, including mortgages, bonds and consumer loans. Conti was a senior banker who handled U.S. dollars; Allen was the global head of cash.