The Bank of Credit and Commerce International (BCCI) was a major international bank founded in Pakistan in 1972. At its peak, it operated in 78 countries, had over 400 branches, and claimed assets of $25 billion.
BCCI became the focus in 1991 of the world's worst financial scandal and what was called a "$20-billion-plus heist" (Beaty & Gwynne 1993). It was found by regulators in the United States and the United Kingdom to be involved in money laundering, bribery, support of terrorism[1], arms trafficking, the sale of nuclear technologies, the commission and facilitation of tax evasion, smuggling, illegal immigration, and the illicit purchases of banks and real estate. The bank was found to be worthless, with at least $13 billion unaccounted for.
Investigators in the U.S. and the UK revealed that BCCI had been "set up deliberately to avoid centralized regulatory review, and operated extensively in bank secrecy jurisdictions". Its affairs are extraordinarily complex. Its offers were sophisticated international bankers whose apparent objective was to keep their affairs secret, to commit fraud on a massive scale, and to avoid detection"[2]; BCCI organized its own intelligence network, diplomatic corps, and shipping & trading companies.
The liquidators, Deloitte & Touche, filed a lawsuit against Price Waterhouse and Ernst & Young, the bank's auditors, which was settled for $175 million in 1998. A further lawsuit against the emir of Abu Dhabi, a major shareholder, was launched in 1999 for around $400 million. BCCI creditors also instituted a $1 billion suit against the Bank of England as a regulatory body. After a nine-year struggle due to the Bank's statutory immunity, the case went to trial in January 2004. However in November 2005 liquidators Deloitte dropped any action against the Bank of England as it was no longer considered in the best interests of the creditors after a High Court ruling.
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