Ex-BCCI Official Pleads Guilty to Fraud Charges

A banker who oversaw the machinery of the vast Bank of Credit & Commerce International swindle pleaded guilty Friday to federal charges of bank fraud.

Swaleh Naqvi’s plea came three years after BCCI was seized amid reports that it had served as a haven for drug dealers, dictators and money launderers.

Naqvi, former chief executive of the bank, is the highest ranking BCCI executive to plead guilty in this country’s prosecution of the global case.

International bank regulators seized BCCI, headquartered in Luxembourg, London and the Cayman Islands, on July 5, 1991. They acted on auditors’ reports that described huge losses from illegal loans to corporate insiders and from trading transactions.

Naqvi’s plea to three counts involving conspiracy, wire fraud and racketeering was accepted by U.S. District Judge Joyce Hens Green. The indictment also alleged a fourth count of aiding and abetting, but that charge was not addressed in the plea hearing.

The 61-year-old former banker, dressed in a dark suit and wearing glasses with thick black frames, answered Green’s questions about the complex 12-page agreement.

“Your honor, I understand everything and thank you very much,” Naqvi said quietly at the conclusion of the 2 1/2-hour hearing.

Naqvi faces a prison term ranging from 6 1/3 years to nearly 8 1/2 years, which would reflect credit for more than 2 1/2 years that he served in custody in Abu Dhabi. That Persian Gulf nation was BCCI’s biggest shareholder.

Acceptance of the plea agreement means that two separate federal cases against Naqvi in Tampa, Fla., and Atlanta will be dropped. Sentencing was scheduled for Oct. 19.

The agreement concludes two months of plea negotiations with the Justice Department and marks one of the most significant developments in the prosecution of the BCCI scandal.

Gerald M. Stern, a Justice Department prosecutor, said Naqvi’s cooperation with federal investigators could help in pending cases against BCCI founder Agha Hasan Abedi and BCCI investor Ghaith R. Pharaon.

“It’s important to justice and this country to have the full story of BCCI come out,” Stern said. Abedi and Pharaon have yet to be extradited to the United States.

The downfall of BCCI, with operations in nearly 70 countries, left some 250,000 depositors without their funds. Negotiations continue over a plan to repay them perhaps half of what they had in the bank at the time of BCCI’s demise. Claims by depositors and creditors exceed $10 billion.

A strong challenge to the plea agreement came before the hearing began.

New York Dist. Atty. Robert M. Morgenthau said the penalty was inadequate. He suggested a term ranging from 17 years to 21 years.

“The defendant’s crime was a long-term, calculated crime of treachery,” Morgenthau said in a letter to Green.

Assistant U.S. Atty. Anthony Leffert strongly objected to Morgenthau’s criticism. “This plea does in fact do justice,” he said, noting Naqvi’s cooperation with prosecutors.

Naqvi still faces a 1991 state criminal indictment in New York.

Leffert described a detailed case against Naqvi that began with BCCI’s founding in 1972 and focused on BCCI’s secret ownership of U.S. banks, including what was once the largest bank in the nation’s capital, the former First American Bankshares. The others were Independence Bank of Encino, National Bank of Georgia in Atlanta and CenTrust Savings Bank of Miami.