WASHINGTON (AP) _ The Federal Reserve announced Wednesday it was levying a $20 million civil penalty against Kemal Shoaib, the former chairman of a California bank that was illegally controlled by the foreign-owned Bank of Credit and Commerce International.

The Fed, which regulates bank holding companies, also issued an order permanently barring Shoaib, a native of Pakistan, from the U.S. banking industry without prior approval of regulators.

The Federal Reserve Board took the action against Shoaib following the recommendation of an administrative law judge. The judge found that Shoaib did not show cause for his failure to contest the regulators' allegations against him.

Last July, the Fed began administrative proceedings against Shoaib and three other individuals involved in the scandal surrounding the Bank of Credit and Commerce International, known as BCCI.

Under government regulations, Shoaib had 20 days to file a response to the Fed's notice. Documents notifying him were delivered to Shoaib's secretary in his London office but were returned to the Fed, the agency said.

Wednesday's order demands immediate payment and cannot be appealed. The Fed froze Shoaib's U.S. assets in October. Fed spokesman Joseph Coyne declined to specify the amount of the frozen assets.

Shoaib was chairman of Independence Bank, a small institution based in Encino, Calif., that was secretly acquired by BCCI in 1985. Independence grew rapidly under BCCI control but ran up losses by investing in real estate.

The Fed revealed last summer that Independence's controlling shareholder, Saudi tycoon Ghaith Pharaon, was a front man for BCCI. Pharaon, a former BCCI shareholder, bought Independence for $23 million.

Pharaon also was accused by regulators of being BCCI's front man in its illegal takeovers of First American Bankshares Inc. of Washington and National Bank of Georgia. The Fed brought a civil suit against him last September seeking a $37 million fine.

Federal regulators seized Independence in late January. They said depositors would be fully protected, and the cost would be covered by a special fund set up recently from BCCI's forfeited U.S. assets.

Under an agreement recently approved by a federal court in Washington, BCCI pleaded guilty to racketeering charges and agreed to forfeit a record $550 million in U.S. assets.

BCCI was shut down last July by regulators in the United States, Britain and other countries amid allegations of drug money laundering, arms trafficking and massive fraud.

Shoaib, a former officer of BCCI, was the chairman of Independence from October 1985 to January 1989.

The Fed alleged in July that Shoaib was appointed chairman of Independence by Agha Hasan Abedi, the Pakistani founder and former head of BCCI.

''Although federal and (California) authorities were aware that Shoaib, a former BCCI officer, would become chairman of Independence, they were not informed that the decision regarding his position was made by BCCI,'' the Fed said in July.

While he was chairman of Independence, Shoaib continued to act on behalf of BCCI, reported to senior BCCI officials about Independence, and continued to receive benefits from BCCI - including a subsidized home mortgage loan and pension benefits - the Fed had alleged.

The central bank also said that Shoaib helped BCCI exercise illegal control of Independence by seeking BCCI's approval of personnel appointments at Independence and of infusions of capital into the California bank.

The Fed had alleged that Shoaib's actions involved ''personal dishonesty'' - including participating in the falsification of official documents filed with federal agencies and the ''willful concealment'' from regulators of BCCI's control of Independence through Pharaon.

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