BCCI fraud, bribery trial opens in N.Y.

March 31, 1993|By New York Times News Service

NEW YORK -- The state bribery and fraud trial involving the defunct Bank of Credit and Commerce International began yesterday in a small crowded courtroom in Manhattan, and opening statements by prosecution and defense lawyers made it clear that Clark M. Clifford, the former defense secretary and adviser to presidents, would be prosecuted, in effect, in absentia.

Mr. Clifford is in a hospital in Washington recovering from heart bypass surgery. But his co-defendant and law partner, Robert A. Altman, faced the jury as the 2-year-old scandal involving the internationally political and influential bank finally reached a courtroom.

BCCI, a Middle East institution that was once one of the world's biggest private banks, was shut down in 1991 after regulators around the world accused it of stealing billions of dollars from depositors and funneling the money to bank insiders. It has been portrayed as one of history's greatest financial frauds.

As they unraveled the tangled tale of the bank after its collapse, investigators said it had connections to political figures and government intelligence agencies around the world and that its customers ranged from Arab terrorists to the CIA.

In their opening statement, prosecutors offered the first glimpses of how the case is likely to touch on the delicate relationship between UnitedStates and Middle Eastern governments, including testimony from the two former top officials of Saudi Arabia's intelligence agency, Sheik Kamal Adham and Sheik Abdul Raouf Khalil.

Outside the courtroom at the end of the day, the prosecutors also disclosed for the first time that one witness, an unnamed former BCCI executive, would testify that he was present in a room with Mr. Clifford and Mr. Altman when they discussed defrauding American banking regulators.

The disclosure marked the first time prosecutors have said that they had a "smoking gun" and that their evidence was more than circumstantial.

Mr. Clifford and Mr. Altman are accused of taking bribes from BCCIin exchange for concealing its ownership of First American Bankshares, a Washington holding company of which Mr. Clifford was chairman. The two men said they did not know that BCCI secretly controlled their bank.

"Clifford and Altman had triple roles in the heart of this scheme," charged John W. Moscow, an assistant district attorney, in his opening statement. "They helped the head of BCCI and they committed fraud, received bribes and used deception to do it." Mr. Moscow said that "Clifford abused his power and nobody in Washington was in a position to take him on."

But Mr. Altman's lawyer, Gustave H. Newman, contended that both Mr. Clifford and Mr. Altman had been deceived by BCCI.

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