BCCI Investigation to Go Deeper
Federal, State Prosecutors Probe Money Laundering
NEW YORK -- Federal and New York state prosecutors are continuing to investigate BCCI Holdings for money laundering, despite a major restructuring proposed by the Luxemborg-based company.
"Our investigation is going to go forward," said a spokesman for the Manhattan district attorney's office. If the restructuring hampered the agency's investigation, the spokesman added, it could be construed as an obstruction of justice.
The Justice Department is also proceeding with its investigation, a spokesman confirmed.
The Manhattan district attorney's office and the Justice Department are separately investigating whether BCCI used branches in New York, California, and Miami, and its First American Bankshares Inc. unit, as part of an international money-laundering network.
In an apparent response to the investigations, BCCI plans to dissolve its current structure and re-emerge as three separate banks.
The restructuring is strongly opposed by John Kerry, chairman of the Senate's subcommittee on terrorism, narcotics, and international operations. Mr. Kerry says this plan would make it difficult to regulate the company.
BCCI's restructuring can go forward if approved by the Federal Reserve Board. Fed officials could not be reached for comment.
Conviction Inaugurates Changes
BCCI, which is owned by the Abu Dhabi royal family and government, agreed to shut down its U.S. offices last year after its Tampa agency was convicted of money laundering.
Regulators have also ordered the company to sell its controlling interests in First American Bankshares, the biggest bank in Washington, D.C., and Independence Bank of California, a community bank in Encino, Calif.
Investigations into BCCI are part of a broader effort by federal and state authorities to crack down on narcotics money laundering.
An estimated $110 billion worth of illegal narcotics are sold annually in the United States, according to the Manhattan district attorney's office. More than $10 billion is funneled through New York-based financial institutions, the agency says.