More than ten years have passed since Lehman Brothers filed for bankruptcy, ushering in the most acute phase of the financial crisis. And while the punishing affects of the crisis have permanently harmed the finances of middle-class Americans and citizens of other Western nations - savings rates remain at post-crisis lows and fewer adult Americans own stocks than at any point in recent memory - no bank executives have faced criminal penalties - that is, until very recently.

The first trial of a group of banking executives pertaining to fraud that occurred during the crisis began earlier this month in a London courthouse. And while it has nothing to do with sales of the toxic mortgage backed securities and subprime loans that nearly brought down the financial system and forced millions of consumers out of their homes, it might be the closest thing to closure that the UK's Serious Fraud Office can offer.

As we reported a few weeks back, four Barclays executives, including former CEO John Varley, are on trial for fraud related to two emergency capital raises undertaken in 2008. To try and stave off nationalization (which would have devastated shareholders and, more importantly, placed the executives' bonuses at risk) the bank turned to a group of Qatari investors who pumped a total of roughly 12 billion pounds (nearly $16 billion) into the bank. In exchange for the emergency loans, Barclays paid 322 million pounds ($423 million) in "fees" - which were, in reality, "dodgy" payoffs to the Qatari sheikh who arranged the financing. To ensure that the deal went through, the executives allegedly conspired to conceal these payments from their investors, the British state and - most importantly - the press.

John Varley

Now that the jury has been selected and the trial begun in earnest, some more juicy details about the prosecution's case are beginning to leak to the media. To that end, Bloomberg reported that the SFO has produced emails, phone calls and transcripts of conversations to demonstrate to the jury that the four men conspired to mislead investors by entering into fake advisory deals with Qatar to conceal the side payments, and making up a "misleading audit trail" to mask the fact that the money was sent directly to Virgin Islands-based company called "Challenger" that was controlled by the family of then-Prime Minister Sheikh Hamad bin Khalifa Al Thani.

Advisors to Varney reportedly were surprised that he had agreed to go along with the "dodgy" deal.

After lengthy discussions in June 2008, Sheikh Hamad agreed to declare his interest in Challenger, but Varley’s willingness to allow him to be paid a commission structured as an advisory fee still surprised Jenkins, the point man on dealing with the Qataris. He described Sheikh Hamad’s demands as "dodgy" and "wrong," according to phone transcripts. The discussions presented on Friday related to the first capital raising, in which the Barclays executives agreed to pay the Qataris a 3.25 percent investment commission - more than double the rate other investors were getting. They agreed to make the extra payments via a deal in which the Qataris would purportedly deliver advice to the bank in the Middle East. [...] "I’m very surprised that John Varley, given his ethics, is doing this," former Middle East head Roger Jenkins told colleague Richard Boath in a phone call that was played to the jury. "It’s like having the president of the United States advise JP Morgan, you just can’t have it."

In correspondence between the four men and other Barclays employees, European Financial Institutions Head Richard Boath, one of the four executives charged with fraud, joked that he wouldn't wind up in the dock if the deal were uncovered because he owns a home in Brazil, which doesn't have an extradition treaty with the UK.

The executives said they were seeking advice from their lawyers on the matter, according to transcripts of the conversations. At one point, Boath asked Barclays lawyer Judith Shepherd whether they would have to demonstrate that the Qataris actually provided services. Shepherd said that they would if there were challenges from investors, the regulator or criminal authorities. "I’m already feeling sick," Boath responded. "I wouldn’t have agreed to it, but there you go." "Well big dog will be in the dock first," Shepherd said, referring to Jenkins. "We’re not playing a game here." When Barclays presented a draft advisory agreement to the Qataris, it was roundly rejected, Boath said in another call with Shepherd. "I could hear the spit landing on the telephone," he said. "I do know what he’s getting at but he’s got to grow up," Shepherd said. "He is going to have to give the services in exchange, otherwise you are going to end up in front of the Fraud Squad explaining why." "No, I’ve got a house in Brazil, there’s no extradition treaty," Boath joked. "I’m off."

In another phone call, Roger Jenkins, the bank's former Middle East head who helped arrange the deal, chided his colleagues to stop worrying about what might happen if authorities caught wind of their scheme and just "get on with it."

In a phone call with Kalaris, Boath raised the possibility of their plan being discovered, prosecutor Brown said, and played a recording of the conversation. "There’s obviously the jeopardy that we’re rumbled and people say well that was bulls--t, you know, this is just a fee in the backdoor," Boath said. "My guess is that we will be completely protected if we disclose that we had an arrangement, right?" Kalaris responded, with Boath then saying that "everyone will have a view on this." As Barclays hesitated about the fees, fearing the investment may be blocked by regulators, Jenkins grew impatient. "F--king stop messing around you stupid people," Jenkins said in a phone call with Boath, which was played to the jury. "We want their money, so take the f--king risk. Just put it in the prospectus, let’s just move on for f--k’s sake."

During the crisis, the ever-present fear that the government could turn up at their front door and nationalize the bank led to "paranoia" among top executives, including Investment Banking head Bob Diamond, who went on to become CEO of Barclays (before being toppled in the aftermath of the Libor scandal). He hasn't been charged in the case.

"John is scared to death that the government turn up tomorrow morning," Jenkins said in the recording. "And Bob is f---ing paranoid." Diamond was also worried about losing his job, he added.

Despite the brazenness of these comments, the SFO still has its work cut out for it: prosecutors already botched a criminal case against the bank itself. And due to a shakeup in the people running the probe, many are worried that the SFO might miss what could be its best shot at punishing banking executives for misdeeds committed during the crisis.