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Pakistani shipping tycoon convicted in BCCI fraud

April 3, 1997

LONDON (AP) _ A Pakistani shipping tycoon was convicted Thursday of conspiring to funnel $1.2 billion out of the rogue bank BCCI in a scheme that ultimately contributed to the bank’s collapse.

Abbas Gokal, 61, faces up to 17 years in prison, fines and confiscation of his assets when he is sentenced next month on two conspiracy counts.

Gokal and 10 other co-conspirators, including his brothers Mustafa and Murtaza, were accused of plotting to commit false accounting and conspiring to defraud the Bank of Credit and Commerce International.

Mustafa and Murtaza Gokal have avoided prosecution by staying in Pakistan, which has no extradition treaty with Britain. One of the other alleged conspirators has died, and the others are believed to be safely out of the reach of British justice, mostly in Pakistan.

Abbas Gokal was arrested in July 1994 in Frankfurt as his flight from Karachi to the United States stopped for refueling. He was extradited to Britain in December 1994 and went on trial in September.

Jurors convicted Gokal on Thursday after hearing prosecutors contend that Gokal, former chairman of the Gulf Group, had siphoned the money out of BCCI and then used it to pay for private jets, fancy homes and Rolls-Royces.

Gokal said he was innocent and had to use public assistance to get legal representation.

Gulf Group, a Middle East shipping company, was the biggest borrower from BCCI and owed $1.2 billion when international banking regulators closed the bank in July 1991.

The Gokal brothers had once controlled more than 100 shipping vessels in the Middle East, but their financial empire ran into trouble the late 1970s. For years, BCCI kept giving them money and altering its books to try to cover up the problem.

Prosecutors said Gokal orchestrated a huge scam that involved corrupt officials, secret bank accounts and thousands of bogus documents, many of them printed at BCCI’s head London office.

Both his shipping company and BCCI were based in Luxembourg.

BCCI owed creditors $10.5 billion when it went bust, wiping out many families’ life savings, but liquidators have recovered some $4 billion and recently began making partial repayments to the depositors.

The depositors have now gotten back about $2.6 billion with more payments to come.

The liquidators, from the accounting firm of Deloitte and Touche, were hoping that if prosecutors get any of Gokal’s assets that the BCCI depositors might be in line for the money. The liquidators have also filed a civil suit in London seeking to recover funds from Gokal.

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