Former Rabobank money market trader Paul Thompson was handed to US authorities and is travelling to New York to face wire and bank fraud charges.
The Perth resident was indicted by a grand jury in the US in 2014 over allegations he conspired to manipulate the London Interbank Offered Rate (Libor) to help his trades.
He is the first Australian to have been arrested and charged for his alleged role in the multi-billion dollar global financial scandal.
Mr Thompson was arrested in Perth in October 2015 and was on bail until he was taken into extradition custody in late June.
A spokesman for the Thompson family said on Wednesday that Mr Thompson “had agreed with authorities to travel to the United States and is currently en route to New York”.
A spokeswoman for the Attorney-General’s Department confirmed Mr Thompson had “been surrendered to the United States from Australia pursuant to a request for his extradition”.
“Mr Thompson is wanted by the United States to face prosecution for wire and bank fraud offences,” the spokeswoman said.
“As the matter is now before the court in the United States, it would not be appropriate to comment further.”
The allegations against Mr Thompson stem from his employment with Dutch bank Rabobank between 2006 and 2011, according to US court documents. Mr Thompson was a senior derivatives trader with Rabobank based in Singapore from 2003 to 2006 and Hong Kong from 2006 to 2011.
He traded financial products with other parties, including US banks, where the profitability of a trade relied on Libor; a benchmark used to set the rate on trillions of dollars of bonds, loans and other interest-rate products around the world.
Authorities have been prosecuting traders, and fining banks, for collaborating to shift Libor to make money on their trades and cheat trading partners.
The rate could be manipulated because it required a theoretical borrowing rate to be submitted by the 16 participating banks, including Rabobank, which opened the way for false pricing. The process has since been overhauled.
Two other former Rabobank traders, Anthony Conti and Anthony Allen, were convicted in the US in November and given one-year and two-year sentences, respectively, which they are appealing. Two former Deutsche Bank traders and three other former Rabobank traders have pleaded guilty. This week in London, three former Barclays employees were found guilty of manipulating the key financial rate.
Mr Thompson had hoped to defend himself against the allegations in Australia. He was due to face an extradition hearing in June, at which he would have had the option to mount an argument that he was ineligible for surrender to the US, but appeared in court in May and consented to be surrendered to US authorities.
If he had attempted to frustrate the US’s extradition attempts, it could have opened the way for prosecutors to allege at a future trial in the US that he resisted extradition.
His case is expected to be heard by Judge Jed Rakoff of the Federal District Court in Manhattan.