https://en.wikipedia.org/wiki/Bank_of_Credit_and_Commerce_International
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The Bank of Credit and Commerce International (BCCI) was an international bank founded in 1972 by Agha Hasan Abedi, a Pakistani financier.[1] The Bank was registered in Luxembourg with head offices in Karachi and London. A decade after opening, BCCI had over 400 branches in 78 countries and assets in excess of US$20 billion, making it the seventh largest private bank in the world.[2][3]
BCCI came under the scrutiny of financial regulators and intelligence agencies in the 1980s, due to concerns that it was poorly regulated. Subsequent investigations revealed that it was involved in massive money laundering and other financial crimes, and had illegally gained the controlling interest in a major American bank. BCCI became the focus of a massive regulatory battle in 1991, and, on 5 July of that year, customs and bank regulators in seven countries raided and locked down records of its branch offices.[4]
Investigators in the United States and the UK revealed that BCCI had been “set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions. Its affairs were extraordinarily complex. Its officers were sophisticated international bankers whose apparent objective was to keep their affairs secret, to commit fraud on a massive scale, and to avoid detection”.[5]
The liquidators, Deloitte & Touche, filed a lawsuit against the bank’s auditors, Price Waterhouse and Ernst & Young, which was settled for $175 million in 1998. By 2013, Deloitte & Touche claimed to have recovered about 75% of the creditors’ lost money.[6]
[SIZE=6]Money laundering[edit][/SIZE]
In addition to violations of lending laws, BCCI was also accused of opening accounts or laundering money for figures such as Saddam Hussein, Manuel Noriega, Hussain Muhammad Ershad, and Samuel Doe,[11] and for criminal organizations such as the Medellin Cartel and Abu Nidal.[13] Police and intelligence experts nicknamed BCCI the “Bank of Crooks and Criminals International” for its penchant for catering to customers who dealt in arms, drugs, and hot money.[14]
William von Raab, a former U.S. Commissioner of Customs, also told the Kerry Committee that the U.S. Central Intelligence Agency held “several” accounts at BCCI. According to a 1991 article in TIME magazine, the National Security Council also had accounts at BCCI, which were used for a variety of covert operations, including transfers of money and weapons for Iran-Contra.[15]
[SIZE=6]Investigations begin[edit][/SIZE]
BCCI’s demise began in 1986, when a U.S. Customs undercover operation led by Special Agent Robert Mazur infiltrated the bank’s private client division and uncovered their active role soliciting deposits from drug traffickers and money launderers. This two-year undercover operation concluded in 1988 with a fake wedding that was attended by BCCI officers and drug dealers from around the world, who had established a personal friendship and working relationship with undercover agent Mazur. At the same time he was dealing undercover with BCCI executives, Mazur used his undercover operation to establish a relationship with the hierarchy of the Medellin Cartel as one of their sources for laundering drug proceeds. Mazur’s and others’ roles in the sting operation were highlighted in the film The Infiltrator (2016).
In 1988, the bank was implicated for being the center of a major money laundering scheme. After a six-month trial, BCCI, under immense pressure from U.S. authorities, pleaded guilty in 1990, but only on the grounds of respondeat superior. While federal regulators took no action, Florida regulators forced BCCI to pull out of the state.[11]
In 1990, U.S. Senator Orrin Hatch presented an impassioned defense of the bank in a speech on the Senate floor. He and his aide, Michael Pillsbury, were involved in efforts to counter the negative publicity that surrounded the bank, and Hatch solicited the bank to approve a $10 million loan to a close friend, Mazur Hourani.[16]
Frontline: BCCI - The Bank of Crooks and Criminals
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