N.Y. Probes Whether BCCI Used First American to Launder Money
NEW YORK - The Manhattan district attorney's office is investigating whether the Bank of Credit and Commerce International used First American Bank of New York to launder money.
The investigation, the latest indication of alleged illegal dealings between BCCI and subsidiaries of Washington-based First American Bankshares Inc., was sparked by information recently sent by the New York bank to the House Banking Committee. The information showed that nearly 75% of more than $32 million worth of incoming wire transfers from Panama between February 1986 and February 1990 came from BCCI.
Robert Morgenthau, the Manhattan district attorney, announced indictments July 29 against BCCI and two senior officials on fraud, money laundering, and bribery charges. Last year, BCCI pleaded guilty to charges in U.S. District Court in Miami that it had helped former Panamanian dictator Manuel Noriega and Colombian drug traffickers launder money.
For Affiliates' Accounts
The transfers from Panama to First American in New York were carried out on behalf of accounts belonging to Geneva-based Banque de Commerce et de Placements, which BCCI controlled, and for BCCI affiliates in Seoul, South Korea, and Toronto and its agency office in San Francisco.
"We are looking at a situation where BCCI, which covertly owned First American, used it as its correspondent bank in the United States," said a spokesman for the district attorney's office in New York City.
The spokesman did not rule out indictments in addition to those returned in July.
Officials at First American of New York, a state-chartered bank with about $1.6 billion in assets, declined to comment on the wire transfers.
Secret U.S. Bank Acquisition
In March, U.S. regulators disclosed that BCCI had secretly acquired control of $11 billion-asset First American Bankshares. Evidence of substantial wire transfers between First American of New York and BCCI affiliates have also thrown the spotlight on Banque de Commerce and the bank's new owner, Turkey's Cukurova group.
Istanbul-based Cukurova, a Turkish industrial and financial conglomerate, acquired control of Banque de Commerce from BCCI on July 19.
"We expressed our concern about the swift sale of BCP to Cukurova to Swiss bank representatives and urged them to take a look at the transaction," said Jonathan Winer, counsel to Sen. John F. Kerry, D-Mass., who heads the subcommittee on terrorism, narcotics, and international operations of the Foreign Relations Committee.
"The speed of the sale raises questions as to whether due diligence could have possibly taken place," Mr. Winer said. "It makes it possible that the acquirer may have been acting at the behest of some other entity in making the swift decision to buy BCP."
A Cukurova representative in New York was unavailable to comment on Mr. Winer's remarks.
Hartmann's Role
At the center of questions about Banque de Commerce's relationship with BCCI and the quick takeover by Cukurova is the role played by the Swiss bank's chairman, Alfred Hartmann, who also sat on the board of BCCI's parent company, BCC Holdings.
In a telephone interview, Mr. Hartmann, in Zurich, expressed surprise at Mr. Winer's doubts.
Mr. Hartmann noted that the Swiss Federal Banking Commission had set a July 26 deadline for either transferring Banque de Commerce to new owners or liquidating it.
"Liquidation could have taken two or three years, and the cost of it could have meant that assets no longer covered deposits," he said.
Cukurova's Strategy
He added that Cukurova had been looking to acquire a trade-related bank in Switzerland for some time as part of a broader internationalization of its operations.
Mr. Hartmann also said he had no knowledge of the transactions among First American of New York, BCCI Panama, and Banque de Commerce now being investigated by the Manhattan district attorney's office.
"Nobody's bothered to ask me about anything," Mr. Hartmann said. "I would have thought the first thing to do was to call me."
The Manhattan district attorney's spokesman declined to confirm whether Mr. Hartmann or Banque de Commerce were also being investigated. "We are looking at almost the totality of BCCI's activities," the spokesman said.
