Can we be certain that world-renowned banks are transparent and clean in their activity? Not really!
Just look at the history of the biggest financial scandal of the XX century — the crash of the Bank of Credit and Commerce International.
It was created by Pakistani businessman Agha Hasan Abedi in 1972. The founder immediately started using the bank for financial schemes. To fool the whole world, the bank used a well-oiled system of complicated corporate structures. The necessary operations were divided into parts and sent to various legal entities and countries. No law enforcement system could track them.
This made the BCCI the most convenient institution for money laundering — both criminal and public money.
In the 70s, Abedi joined the American financial market. Using the illegal support of American politicians, the Pakistani businessman became a secret owned of the influential bank First American. This helped the BCCI to join forces with one of the biggest financial systems of the world, and to influence it from within.
By the end of 80s, Abedi’s financial empire had 400 subdivisions and chapters in 73 countries worldwide, with 1.3 million clients trusting it with their money. The bank serviced the most influential and controversial clients of its time — from the CIA and the Medelin cartel to Bin Laden and Al Queda.
One of the first investigators was Washington lawyer Jack Bloom. He noticed money laundering schemes, including those for budget money. Despite Bloom’s and his manager John Kerry’s titanic effort, neither the FBI nor other authorities wanted to help with the investigation. Sometimes they actually covered up the evidence that had already been found. Everything changed when the legendary prosecutor Robert Morgenthau took on the case. First, the Justice Department and other offices resisted him, too. But in 1988, Abedi suffered a heart attack and stepped back from the affairs. Without the founder, the financial empire quickly started falling apart, which helped the prosecutor.
Step by step, Morgenthau managed to prove the BCCI’s criminal influence on the financial situation in the USA and worldwide. In 1991, the prosecutor charged the bank and two of its investors – Abedi and his friend Naqvi. Morgenthau claimed that USD 20 billion disappeared from the BCCI accounts. Eventually, Abedi and Naqvi pleaded guilty, the bank paid USD 10 million in fines and lost USD 550 million of American deposits.
Litigation with bank investors go on until now. It turned out that the BCCI was a complex financial pyramid that generated losses by its very nature and existed only by using people’s deposits. Later, Robert Morgenthau called the BCCI “the largest bank fraud in world financial history.” But it was not for nothing! This story was what pushed the entire world to start active struggle against financial crime. And the USA, which was the first country to solve a crime of that scope, was at the forefront of that fight.