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David L. Paul

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.

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David L. Paul was a real estate developer and owner of CenTrust Savings Bank of Miami.1

Business and Financial Activities

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.3 He also spent $7 million on a ninety-five-foot yacht with a marble fireplace.4

Paul, along with Ghaith R. Pharaon and Agha Hasan Abedi, engineered a sham purchase of CenTrust debentures. 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.5 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.6

Paul had extensive political contacts, giving $300,000 to Democratic politicians and raising more.7 He was appointed financial chairman of the Democratic Senatorial Campaign Committee in 1987 by Senator John Kerry.8 His personal calendar showed frequent meetings with numerous senators and other key political figures.9

In 1992, Paul and Pharaon were indicted together by the Department of Justice in Miami for the bond-swap conspiracy.10 His business practices and connections were scrutinized during the BCCI scandal, highlighting the intertwined nature of finance and politics.

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. 10. ↩
  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. 218. ↩
  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. 218. ↩
  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. 220. ↩
  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. 85. ↩
  7. 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. ↩
  8. 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. ↩
  9. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 221. ↩
  10. Beaty, Jonathan and Gwynne, S. C. The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI. New York: Random House, 1993, p. 221. ↩

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