The BCCI Fraud Case
The BCCI Fraud Case
For many years the Bank of Credit and Commerce International (BCCI), committed one of the most elaborate fraud of its time. The BCCI generated roughly $15 billion in false revenues. The people who stood to lose the most were the individuals involved with producing these funds and a select set of treasured clients.
According to the New York Times the bank had been up to suspicious acts beginning in the early 1980’s it was a ““stateless” bank that operated in the United States and about 70 other countries, chartered in Luxembourg, run by Pakistanis, owned by Arabs, headquarters in Britain and serviced by outputs in the Cayman Islands, a well-known haven for private banking.” The bank soon had a nickname of the “Banks of Crooks and Criminals”. Even though employees noticed the book keeping was a little off, none of them knew the full extent of this large fraud. In many instances when there was not enough funds to cover the banks obligations and forwards to their selected customers they would just take from other depositors, and reinvest that money in the bank. The most shocking thing is that the group of people who pulled this off, only consisted of under 30 people. Certain documents were off limits for other employees, but this group was said to be the keepers of the secrets. What made the fraud so much more elusive was the idea of a “bank within a bank”. When the bank needed money they would just funnel money in from somewhere else to make the books appear correct. So many aspects of the case should have set off red flags long before it was actually discovered.
Source : New York Times Article
For many years the Bank of Credit and Commerce International (BCCI), committed one of the most elaborate fraud of its time. The BCCI generated roughly $15 billion in false revenues. The people who stood to lose the most were the individuals involved with producing these funds and a select set of treasured clients.
According to the New York Times the bank had been up to suspicious acts beginning in the early 1980’s it was a ““stateless” bank that operated in the United States and about 70 other countries, chartered in Luxembourg, run by Pakistanis, owned by Arabs, headquarters in Britain and serviced by outputs in the Cayman Islands, a well-known haven for private banking.” The bank soon had a nickname of the “Banks of Crooks and Criminals”. Even though employees noticed the book keeping was a little off, none of them knew the full extent of this large fraud. In many instances when there was not enough funds to cover the banks obligations and forwards to their selected customers they would just take from other depositors, and reinvest that money in the bank. The most shocking thing is that the group of people who pulled this off, only consisted of under 30 people. Certain documents were off limits for other employees, but this group was said to be the keepers of the secrets. What made the fraud so much more elusive was the idea of a “bank within a bank”. When the bank needed money they would just funnel money in from somewhere else to make the books appear correct. So many aspects of the case should have set off red flags long before it was actually discovered.
Source : New York Times Article