BCCI Criminal Investigations Launched in U.S., Britain
The United States and Britain began separate investigations last week into Bank of Credit and Commerce International, the $20 billion-asset Luxembourg-based bank seized by regulators worldwide on July 5 because of losses attributed to fraud.
Jay B. Stephens, U.S. attorney for the District of Columbia, said Friday his office had begun an investigation into possible criminal violations at BCCI and three U.S. banks it owns: First American Corp., National Bank of Georgia, and Independence Bank of Encino.
A spokesman said that the investigation had been launched after the Federal Reserve Board referred its own findings to the attorney's office.
In London, Norman Lamont, the chancellor of the Exchequer, said the decision to hold an independent public inquiry followed a growing political storm over BCCI and estimated losses of at least $4 billion at the bank.
The government confirmed Thursday that the British Treasury had been sent a letter by BCCI staff members more than a year ago, alleging widespread corruption at the bank.
BCCI was cast into the spotlight last year when its agency in Tampa, Fla., was convicted of money laundering. In March, BCCI also agreed to divest itself of an at least the 25% stake it had secretly acquired in First American as well as undisclosed stake held in Independence.
Noriega Held Accounts
Investigators have also discovered BCCI accounts at First American that were used by former Panamanian dictator Manuel Noriega.
In London, the letter sent to the Treasury was subsequently "lost" after being sent on to the Department of Trade and Industry, a government agency with responsibility for financial services regulation.
Mr. Lamont said the government agreed to an independent inquiry into the supervision of BCCI under British banking laws because of widespread concern about the situation and actions by regulators leading to the bank's seizure.
Accusation in Parliament
In Parliament, opposition Labor politicians accused the government of being slow to act over BCCI when suspicions of fraud were received a year ago.
British municipal authorities had about $150 million on deposit with the bank and must now wait for audits of its assets to see if they will receive compensation.
Some authorities may sue the Bank of England and money brokers that arranged the deposits.
Meantime, the British government continued to insist that evidence of fraud that justified the closure of BCCI only reached the Bank of England on June 27.
Separately, the ruler of Abu Dhabi, the Arabian gulf oil state that owns 77% of BCCI, sharply attacked the Bank of England over the closure action in a series of newspaper ads in Europe, saying it had sabotaged a rescue plan for the bank that would have protected depositors. [Tabular Data Omitted]