BCCI was a bank started in 1972 that was used by the CIA and helped fund groups like Osama bin Laden. It engaged in money laundering and catered to criminal clients. It had over $20 billion in assets making it one of the largest private banks. However, it used complex structures across 70 countries to avoid regulation. This included unusual accounting practices designed to frustrate investigators. It was eventually shut down in 1991 after audits revealed its criminal activities.

1. BCCI
Bank of Credit and Commerce
International
Shoaib Farooqi
Tony Tran

2. Background
 Started in 1972 by Agha Hasan Abedi
and Sheikh Zayed bin Sultan al
Nahyan (UAE)
 Used by CIA to funnel $ to Afghanistan
 Helped Osama bin Laden, Saddam
Hussein, even George W. Bush

3. Opportunity for Moral Hazard
 Financially motivated, but also
religiously motivated
 Government regulation
 Pakistan's state
◦ All banking nationalized
 Giant Ponzi Scheme

4. BCCI’s Financial Structure or:
How I learned to stop probing and love
decentralization
 Money laundering, bribery
 Catered to Saddam Hussein, Noriega,
Columbian drug dealers
 Black market:
◦ Guns, and drugs, and sex slaves oh my!
 Assets of more than $20 Billion,
making it the 7th largest private bank
by assets

5. How to avoid Gov’t Regulation 101
 # of managers, all over the world reported
directly to 1 person.
 Holding companies, off-shore banking,
branches and subsidiaries in 70 countries
 Accounting done longhand on paper ledgers
written in Pakistani’s Urdu
 Unusual Accounting system: PWC for foreign,
and Ernest & Young for its 2 holdings at
headquarters. Constant revision of financials
 Frustrate investigators/auditors

6. Where BCCI screw up
 BCCI wants to expand into US market
using “straws”
 Raises eyebrows
 Audited by Price Waterhouse and
Ernst & Young
 BCCI shutdown after audits
 75% of creditors reimbursed, but
estimated $9.5-15 billion stolen