Independence Bank May Get Cash to Survive : Banking: Its alleged secret owner, Bank of Commerce and Credit International, may pump money into the ailing institution under a plea bargain with prosecutors, sources say.

Independence Bank, an Encino institution authorities contend was purchased illegally by a front man for the scandal-ridden Bank of Credit and Commerce International, will likely receive a much-needed cash infusion as a result of a guilty plea to financial fraud charges by the bank, two sources familiar with the details said Wednesday.

The sources, speaking on condition of anonymity, said that part of the settlement money with BCCI’s court-appointed liquidators will be designated for a capital infusion into Independence. The size of the infusion could not be determined.

The money is expected to come from BCCI assets--estimated to be worth as much as $500 million--that were frozen in the United States when Western authorities seized BCCI’s worldwide operations in July.

Both sources cautioned that details have not been approved and that negotiations remain highly sensitive. In addition to the infusion, the deal would call for a trustee to be named.

The settlement will mean that BCCI will effectively admit that it improperly owned Independence, the largest bank in the San Fernando Valley, and First American Bankshares Inc., the largest bank holding company in Washington, D.C.

Independence executives have been seeking more than $50 million to nurse the ailing bank back to health and ultimately make it attractive to a buyer. Bank officials have said that the institution could fail by the end of the year if it does not receive financial assistance.

At the request of Federal Reserve Board officials, Chief Executive Fulvio V. Dobrich this year went to Abu Dhabi to make an unsuccessful pitch to representatives of the royal family there--the majority owner of BCCI--to provide an infusion for Independence.

Independence lost $25.2 million in the first half of this year, largely due to bad real estate loans.

The losses have eroded the bank’s capital, the final cushion against losses.

The bank bet heavily on Southern California’s once-hot real estate market under former Chairman Kemal Shoaib, a former BCCI executive who authorities allege was hand-picked by BCCI for the job.

Saudi Arabian tycoon Ghaith R. Pharaon was indicted by federal authorities in November in connection with his alleged secret acquisition of Independence Bank in 1985 for $23 million on behalf of BCCI.

Pharaon has maintained that he did nothing wrong.

Prosecutors allege that the acquisition of Independence was part of a large scheme by BCCI to gain hidden interests in U.S. banks after regulators found that BCCI was unfit to own banks here.

The Independence details are said to be part of a broader BCCI settlement that was being worked out with prosecutors.

The settlement could be announced as early as today.

The settlement, first disclosed in the Wall Street Journal on Wednesday, is subject to approval by BCCI’s court-appointed liquidators in Great Britain and its majority owners in Abu Dhabi.

The Journal said that in addition to substantial fines, the BCCI liquidators would provide a large infusion into First American Bankshares, the largest banking firm in Washington.

Unlike the infusion for Independence, the money for First American is expected to come from Abu Dhabi.

The Washington Post reported that the plea agreements require BCCI to place its 60% holding in First American stock in a trust that would be controlled by an independent trustee and would allow the bank to be sold more easily, as was ordered by the Fed last March.