NEW YORK - Several defendants in the Bank of Credit and Commerce International corruption case have paid $225 million as part of an agreement with New York State authorities, the Manhattan District Attorney's Office announced.
The payment was made on behalf of Khalid bin Mahfouz, former chief operating officer of the National Commercial Bank of Saudia Arabia; Haroon Kahlon, a former executive of that bank; and Eastbrook Inc., a New York-based financial firm.
All charges against Mr. Mahfouz have been dropped in the case. Mr. Kahlon and Eastbrook have pleaded guilty to state charges of failing to register with the state as a broker.
Probe to Continue
The office of District Attorney Robert Morgenthau said it is continuing its probe into BCCI, a Luxembourg-based bank that was shut by regulators around the world in July 1991.
Under the New York settlement, $37 million goes to state and local governments and $188 million to a special reserve fund to settle suits brought by those defrauded in the BCCI scandal.
A statement issued by Mr. Mahfouz noted that authorities had initially sought to collect nearly $780 million. His attorney, Gary P. Naftalis, said the Saudi banker's "slate is cleared and he can devote his full energies to pursuing those who defrauded him and to protecting himself against those who treat him as a deep-pocket target for all of their BCCI litigation."
Another Abu Dhabi Claim
Separately, a government department in Abu Dhabi filed a civil claim there worth more than $1 billion on the basis of criminal charges against 13 former BCCI executives.
The Abu Dhabi Department of Finance is the third claimant to file a civil suit in the case, the biggest to stem from the BCCI collapse.
Two of the defendants are being tried in their absence; 11 attended a hearing Saturday.
The civil claim says the finance department owned shares worth $1.2 billion in BCCI and had $8 million in deposits in the bank. Lawyers said they would also be claiming $100 million in damages and interest owed from the time of the bank's collapse.
BCCI, once one of the world's largest private banking groups, had more than $20 billion of assets and branches in 69 countries before it was closed amid fraud allegations.
All 13 of the Abu Dhabi defendants were named in a $9 billion civil claim filed Dec. 20 by the emirate's ruling family and the Abu Dhabi Investment Authority based on the criminal charges.
The majority shareholders owned 77% of BCCI. A statement issued on their behalf alleged funds were stolen from their personal portfolios, which would have been worth $7 billion if conservatively invested.
