Judge OKs Guilty Plea by BCCI : Scandal: She also ordered the bank to surrender $550 million in assets in the case, which includes charges of fraud, racketeering and conspiracy.
A federal judge on Friday accepted the Bank of Credit & Commerce International’s guilty plea to charges of fraud, racketeering and conspiracy and ordered the scandal-plagued bank to surrender $550 million in assets--the largest such forfeiture in U.S. history.
U.S. District Judge Joyce Hens Green said the plea agreement, which strips the bank of all its U.S. assets, will help ensure “that innocent victims around the world recover at least a portion of their losses.”
About half of the money will be placed in a special fund to pay depositors, creditors and other victims.
The remainder, about $275 million, will be used to shore up two financially ailing U.S. banks in which BCCI admittedly made large, albeit secret, investments: Independence Bank of Encino and First American Bancshares in Washington.
Both banks have suffered losses since their links to BCCI became public.
The agreement was endorsed by 19 law enforcement officials, including Justice Department lawyers, banking agency directors and New York Dist. Atty. Robert M. Morgenthau, who brought the first BCCI indictments last year.
BCCI, which once had more than $20 billion in assets and operated in 69 nations, was shut down July 5 by the United States, Britain and other countries amid charges of widespread fraud. Depositor losses worldwide have been estimated at more than $15 billion. The bank has also been linked to money laundering, drug and arms deals.
As part of the agreement, BCCI pleaded guilty to New York state charges brought in July by Morgenthau, who characterized the case as the biggest bank fraud in history.
It also pleaded guilty to federal charges that included violations of racketeering laws for secretly acquiring the First American and Independence banks, as well as a bank in Georgia.
Former First American Chairman Clark R. Clifford and Robert A. Altman, its former president, remain under investigation in connection with BCCI’s control of that bank. Both have denied any knowledge of BCCI’s role.
The federal charges also involve international money laundering, tax conspiracy violations and fraud in the sale of securities of Centrust Savings Bank of Miami, whose failure will cost taxpayers more than $2 billion.
Ira Raphaelson, the Justice Department’s special counsel for financial crimes, said that criminal investigations would continue against individuals connected with BCCI worldwide. Indictments already have been filed against BCCI founder Agha Hasan Abedi, former bank President Swaleh Naqvi and Saudi Arabian financier Ghaith R. Pharaon, among others. They have denied any wrongdoing.
After Justice Department officials disclosed the charges and the proposed settlement Dec. 19, some creditors and foreign liquidators of BCCI objected to the arrangement, saying they had not been involved in the negotiations and that the agreement would hurt their chances of recovering losses.
Green rebuffed their efforts at blocking the agreement, however, saying the settlement was in the public interest.
Officials stressed that no funds would be paid to any BCCI customers who have been charged with hiding criminal proceeds, such as Latin American drug dealers or Manuel A. Noriega, the ousted dictator of Panama, who is on trial in the United States for drug smuggling.
In her brief comments, Green said the plea agreement would not only facilitate the investigation on a global basis but eliminate further costly litigation in this country since it “resolves all criminal proceedings against BCCI in the U.S.”
