NEW YORK (AP) _ Court papers revealed Monday that a state grand jury in Manhattan is considering criminal charges against Ghaith Pharaon, the Saudi financier already accused of wrongdoing in the Bank of Credit and Commerce International scandal.
The grand jury, empaneled by Manhattan District Attorney Robert Morgenthau, expects to decide whether or not to indict Pharaon by Jan. 23.
The development was revealed in a written opinion by U.S. District Judge Peter K. Leisure of Manhattan, who presides over a civil action against Pharaon by the Federal Reserve Board.
Morgenthau asked the judge to temporarily block Pharaon’s lawyers from taking sworn statements from three of Pharaon’s former U.S. associates. Morgenthau said the interviews could reveal grand jury secrets.
″The criminal investigation and prosecution presently pending in New York County would be frustrated and prejudiced by the early disclosure of the testimony of the three witnesses,″ the district attorney told Leisure.
Leisure agreed to delay the interviews until Jan. 23, the date Morgenthau said the grand jury will have completed its investigation of Pharaon.
Morgenthau’s grand jury probe appears to deepen Pharaon’s involvement in the BCCI scandal, a global web involving alleged drug money laundering, arms trafficking and fraud.
Pharaon, 51, once held a 15 percent stake in the Luxembourg-based BCCI. He’s the subject of several legal actions by U.S. authorities, who accuse him of acting as the bank’s front man in the United States. The Saudi businessman has denied the charges through his New York lawyer.
In September, Judge Leisure agreed with a Fed request to freeze Pharaon’s U.S. assets. The Fed also is seeking a $37 million civil penalty against Pharaon for allegedly disguising BCCI’s role in the purchase of Independence Bank in the Encino section of Los Angeles; the National Bank of Georgia; and with his secret investment in the since-failed CenTrust Savings Bank of Miami.
In a separate action, a federal grand jury in Washington on Nov. 15 indicted Pharaon on criminal charges related to the bank deals.
Pharoan is considered a fugitive because he has not answered a warrant issued in the federal criminal case, Leisure said.
The judge did not reveal details of the state grand jury investigation except to say it was related to the Fed’s case before him, which deals with the acquisition of Independence Bank.
Morgenthau alleged that Pharaon’s attorneys, by seeking to interview the three witnesses, were using the Fed’s civil lawsuit to get secret information about the grand jury investigation, according to Leisure’s decision.
Richard Lawler, Pharaon’s New York lawyer, did not return a call for comment. Leisure noted that the attorneys said they wanted to take the sworn statements to prepare Pharaon’s defense in the civil action.
The three witnesses who Pharaon’s lawyers want to interview were identified as Amer Lodhi, Abhol Helmy and Louis Saubolle.
Lodhi was the chairman and chief executive officer of Pharaon’s main U.S. holding company, InterRedec Inc., of Richmond Hill, Ga., from 1986 and 1991. The roles of Helmy and Saubolle in Pharaon’s empire couldn’t be immediately determined.
But all three were on the list of invited guests at a 1984 BCCI annual conference in Vienna. Helmy was listed as a participant from New York and Saubolle from ″Western America & Pacific,″ according to the invitation.
Morgenthau also complained that Pharaon had hindered his investigation by obtaining an injunction from a London court that limited U.S. investigators’ access to Pharaon’s BCCI-related documents.
The prosecutor said the state grand jury likely would have completed its investigation of Pharaon had there been no English injunction.
Morgenthau has been active in the investigation of BCCI’s alleged fraud. In July, his office obtained a grand jury indictment against BCCI, its Pakistani founder and its former chief operating officer. The defendants were accused of defrauding investors and stealing more than $30 million.