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CenTrust Savings Bank

CenTrust Savings Bank was a financial institution based in Miami, owned by David L. Paul.[^1]

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CenTrust Savings Bank was a financial institution based in Miami, owned by David L. Paul.1

Involvement in BCCI Scandal

BCCI acquired a partnership in CenTrust Savings Bank in July 1987.1 Paul put CenTrust on a significant growth curve using brokered deposits, which he funneled into high-risk real estate loans, junk bonds, and offbeat investments.2 He built a gleaming postmodernist skyscraper for CenTrust, which cost $180 million and featured marble, gold-plated bathroom fixtures, and a $13 million Peter Paul Rubens painting.2

Ghaith R. Pharaon, acting as a front for BCCI, bought $24,668,750 of CenTrust's bonds in 1987. Paul secretly repurchased these bonds less than a year later, and Pharaon received a commission.3 This transaction allowed CenTrust to satisfy regulators and remain open for an additional year, costing U.S. taxpayers an estimated $2 billion when it was finally closed.4

CenTrust's financial troubles were exacerbated by a regulatory action that forced it to divest its wildly imprudent investments and Paul's de facto looting of depositors' funds.5 The Federal Reserve Board later fined BCCI $200 million for illegally acquiring control of CenTrust Savings Bank, along with First American Bank and National Bank of Georgia.6

Sources

  1. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 13. ↩
  2. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 218. ↩
  3. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 220. ↩
  4. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 85. ↩
  5. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 219. ↩
  6. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 14. ↩

Connected to

Organization
Bank of Credit and Commerce International
The Bank of Credit and Commerce International (BCCI) was a Pakistani-founded offshore bank that operated across 78 countries before its 1991 collapse exposed a decade-long conspiracy involving money laundering for drug cartels and intelligence agencies, illegal acquisition of U.S. banks, bribery, fraud, and arms trafficking, in what regulators called the largest bank fraud in history.
5 shared pages
viaSwaleh Naqvi · Ghaith R. Pharaon · David L. Paul · First American Bank
Person
Clark Clifford
Clark Clifford (1906-1997) was a Washington attorney who served as Special Counsel to President Truman, co-authored the National Security Act of 1947, served as Secretary of Defense under Lyndon Johnson, and became the central American figure in the BCCI scandal after he and his partner Robert Altman personally vouched to banking regulators that BCCI would not secretly own First American Bank -- a representation that proved false.
2 shared pages
viaSwaleh Naqvi · First American Bank

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