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20 - ORGANIZATIONS/PRIVATE/CenTrust Savings Bank.md
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---
tags: ["Organization", "Bank", "Financial Institution"]
category: "Private Organization"
summary: "CenTrust Savings Bank was a financial institution based in Miami, owned by David L. Paul.[^1]"
---
CenTrust Savings Bank was a financial institution based in [[Miami]], owned by [[David L. Paul]].[^1]
@ -7,11 +9,11 @@ CenTrust Savings Bank was a financial institution based in [[Miami]], owned by [
[[Bank of Credit and Commerce International|BCCI]] acquired a partnership in CenTrust Savings Bank in July 1987.[^1] 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.[^2]
[[Ghaith 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.[^3] 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.[^4]
[[Ghaith R. 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.[^3] 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.[^4]
CenTrust's financial troubles were exacerbated by a regulatory action that forced it to divest its wildly imprudent investments and Paul's de facto looting of depositors' funds.[^5] The [[Federal Reserve Board]] later fined BCCI $200 million for illegally acquiring control of CenTrust Savings Bank, along with [[First American Bank]] and [[National Bank of Georgia]].[^6]
## Footnotes
### Footnotes
[^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. 13.
[^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.