13) The BCCI Scandal
In 1972, major Pakistani finance Agha Hasan Abdei founded the Bank of Credit and Commerce International (BCCI). The major international bank was register in Luxembourg and within a decade, reached its peak. It operated in 78 countries, had over 400 branches, and also had assets in excess of US $20 billioin, making it the 7th largest private bank in the world according to assets.
In the 1980’s, however, BCCI became the target of a two-year undercover operation conducted by the US Customs Service. The operation concluded with a fake wedding that was attended by BCCI officers and drug dealers from around the world. After a six month trial in Tampa, key bank officers were convicted and received lengthy prison sentences. After bank officers cooperated with law enforcment authorities, BCCI’s many crimes were revealed…
The bank came under the scrutiny of regulatory bodies and intelligence agencies in the 1980s due to its perceived avoidance of falling under one regulatory banking authority, a fact that was later, after extensive investigations, proven to be false. In 1991, BCCI became the focus of a massive regulatory battle and was described as a “$20-billion-plus heist”. Later, U.S. and UK investigators revealed that that BCCI had been “set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions. Its affairs were extraordinarily complex. 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.”
