Bank of Credit and Commerce International
A decade after opening, BCCI had over 4000 branches in 78 countries and assets in excess of US$20 billion, making it the seventh largest private bank in the world.Subsequent investigations revealed that it was involved in massive money laundering and other financial crimes, and had illegally gained 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] during Operation C-Chase.[5][6][7] Investigators in the United States and the UK determined that BCCI had been "set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions.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".BCCI was created with capital of which 25% was from Bank of America and the remaining 75% from Sheikh Zayed bin Sultan Al Nahyan, the ruler of Abu Dhabi in the United Arab Emirates.BCCI expanded rapidly in the 1970s, pursuing long-term asset growth over profits, seeking high-net-worth individuals and regular large deposits.BCCI was among the first foreign banks awarded a license to operate in the Chinese Shenzhen Special Economic Zone which bore testament to Agha Hasan Abedi's public relations skills, a feat that had yet to be achieved by the likes of Citicorp and JP Morgan.Bank of America was "bewildered" by BCCI and reduced its holding in 1980, and the company came to be held by a number of groups, with International Credit and Investment Corp ('ICIC') owning 70%.The bank approached Sheikh Zayed bin Sultan Al Nahyan, who made good the loss in exchange for an increased shareholding of 78%.When the Fed cleared the group of Arab investors to buy First American, it did so on condition that they supplement their personal funds with money borrowed from banks with no connection to BCCI.Abedi was succeeded by Swaleh Naqvi as the bank's chief, who, in the aftermath following controversy over BCCI, was replaced by Zafar Iqbal Chaudhry in the late 1980s.BCCI contended that its growth was fueled by the increasingly large number of deposits by oil-rich states that owned stock in the bank as well as by sovereign developing nations.For instance, a large number of its customers were devout Muslims who are against charging interest on loans – a major pillar of modern banking – because they consider it to be riba, or usury.[18] 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,[18] and for criminal organizations such as the Medellín Cartel and Abu Nidal.[21] 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.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 during the Iran–Contra affair.[25] 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 at Tampa, Florida, and uncovered their active role soliciting deposits from drug traffickers and money launderers.Britain's internal security service, MI5, had signed up two sources inside the branch to hand over copies of all documents relating to Abu Nidal's accounts.He was under indictment in the United States and UK for crimes related to BCCI, but Pakistani officials refused to give him up for extradition because they felt the charges were politically motivated.[32] In 1992, United States Senators John Kerry and Hank Brown became the co-authors of a report on BCCI, which was delivered to the Committee on Foreign Relations.The report found that Clifford and his legal/business partner Robert A. Altman had been closely involved with the bank from 1978, when they were introduced to BCCI by Bert Lance, the former director of the Office of Management and Budget, to 1991.