U.S., Abu Dhabi OK $400-Million BCCI Settlement

U.S. prosecutors and banking officials settled a legal and diplomatic battle with Abu Dhabi on Saturday when the royal family of the Persian Gulf state agreed to give up claims to $400 million that it had invested in First American Bankshares Inc.

The agreement also gives investigators access to a key witness with knowledge of the BCCI financial scandal, sources familiar with the agreement said.

In return, a $1.5-billion civil lawsuit against Abu Dhabi’s ruler, brought by First American’s court-appointed trustee, will be dropped, the sources said.

U.S. prosecutors also have agreed not to pursue any criminal charges against the ruler, Sheik Zayed ibn Sultan al Nuhayan, who was the majority shareholder in the now-defunct Bank of Credit & Commerce International.

With the dropping of Abu Dhabi’s claims on the $400 million, about half will go to the U.S. Treasury and the other half to depositors of BCCI around the world who lost money when the scandal-ridden bank was shut down in 1991.

The deal provides for U.S. investigators to speak for the first time with Swaleh Naqvi, the chief deputy to BCCI founder Aga Hasan Abedi. He is under indictment in the United States on bank fraud charges, but has never been interviewed by prosecutors because he and other key BCCI officials are under house arrest in Abu Dhabi.

The settlement, signed by the parties Saturday after meetings in Geneva, also will give U.S. officials access to BCCI documents that were flown out of London to Abu Dhabi by Naqvi just before the bank was closed by regulators for widespread fraud.

“This is a remarkable agreement in terms of what we’ve succeeded in getting,” said Deputy Atty. Gen. Philip B. Heymann. He praised “the breadth of questions resolved, the money to the U.S. and the level of cooperation among the Justice Department, the New York district attorney’s office and other agencies, both public and private.”

New York Dist. Atty. Robert M. Morgenthau and Justice Department officials have fought for more than three years for the chance to interview Naqvi and other witnesses in Abu Dhabi.

Abedi had a stroke several years ago and is unable to be interviewed. But Naqvi may be able to tell investigators how BCCI came to illegally own four U.S. banks, including First American, and who knew about it in this country.