vault backup: 2026-09-23 16:47:02

10 - PEOPLE/(N-S)/Ghaith R. Pharaon.md

@@ -1,5 +1,7 @@
 ---
 category: "BCCI Scandal"
+alias:
+  - "Ghaith Pharaon"
 tags:
   - Person
   - BCCI
@@ -7,6 +9,36 @@ summary: "Pharaon launched himself into the construction business in Saudi Arabi
 born: 1940-09-07
 died: 2017-01-06
 location: "Riyadh, Saudi Arabia"
+relations:
+  - type: owned
+    with: "[[National Bank of Georgia]]"
+    start: 1978
+    end: 1987
+    role: "nominee for BCCI of 50 percent"
+    fn: 14
+  - type: owned
+    with: "[[Independence Bank of Encino]]"
+    role: "85 percent as fiduciary for ICIC Overseas"
+    fn: 15
+  - type: owned
+    with: "[[CenTrust Savings Bank]]"
+    start: 1987
+    role: "16.9 percent of common stock"
+    fn: 14
+  - type: partner_of
+    with: "[[David L. Paul]]"
+    role: "business associate"
+    fn: 17
+  - type: prosecuted
+    with: "[[United States Department of Justice]]"
+    reverse: true
+    start: 1992-02-28
+    fn: 17
+  - type: investigated
+    with: "[[Federal Reserve Board]]"
+    reverse: true
+    start: 1991-07-12
+    fn: 15
 ---
 Ghaith R. Pharaon was a flamboyant [[Bank of Credit and Commerce International|BCCI]] front man and a [[Saudia Arabia|Saudi]] financier.[^1] He acquired [[Georgia National Bank]] and [[Independence Bank of Encino]], and was a shareholder in [[Attock Oil]], BCCI, and [[CenTrust Savings Bank]].[^2]
 
@@ -22,7 +54,19 @@ He was involved in the sham purchase of CenTrust debentures, acting as a front f
 
 Pharaon had extensive political connections, including with [[Jimmy Carter]], to whose charitable organizations he made donations.[^9] He was involved in lobbying efforts to keep CenTrust afloat, meeting with figures like [[M. Danny Wall]], then the nation's top thrift regulator.[^10]
 
-Pharaon was indicted by the [[Department of Justice]] in 1992 for his role in the bond-swap conspiracy related to CenTrust and the secret ownership of [[Independence Bank of Encino]].[^11] He is described as fleeing from several indictments in the United States and is under investigation in [[Argentina]].[^12]
+Pharaon was indicted by the [[Department of Justice]] in 1992 for his role in the bond-swap conspiracy related to CenTrust and the secret ownership of Independence Bank of Encino.[^11] He is described as fleeing from several indictments in the [[United States]] and is under investigation in [[Argentina]].[^12]
+
+### National Bank of Georgia
+
+According to the [[BCCI Kerry-Brown Senate Report|Kerry-Brown Senate Report]], BCCI owned 50 percent of the [[National Bank of Georgia]] from its ostensible sale to Pharaon in 1978, with Pharaon holding those shares as its nominee; the Federal Reserve concluded in 1991 that he had borrowed at least part of the purchase money, "with BCCI as his partner in the transaction from the beginning." In November 1981 he formed a holding company, GRP, Inc., renamed NBG Financial Corporation the next year, and agreed with BCCI that they would divide expenses equally and treat the bank as equally owned. In August 1983 he formed two further companies, Interedec (Georgia) N.V. of [[Curacao]] and Interedec (Georgia) of [[Nassau, Bahamas|Nassau]], stacked so that each held the one below; the report found that "the obvious purpose and intent of this series of holding companies... was to permit Pharaon and BCCI to sell or mortgage Pharaon's interest in NBG without regulators or creditors finding out." Pharaon Holdings Limited of Nassau then acquired his 50 percent interest without the notice to the Federal Reserve required by law. On January 1, 1985, he signed a secret "Memorandum of Deposit" pledging all the shares of NBG Financial to BCCI as collateral for his loans and giving BCCI "or its nominees" the right to vote them. In December 1986, in the words of the Federal Reserve's charges, "BCCI caused [[Credit and Commerce American Holdings|CCAH]] to agree to purchase the shares of NBG [Financial] from Pharaon for $220 million."[^13][^14]
+
+### Independence Bank
+
+BCCI officials selected the Independence Bank of Encino for secret acquisition in November 1984. Under a nominee agreement with BCCI's affiliate [[ICIC|ICIC Overseas]], set out in the [[Federal Reserve Board|Federal Reserve]]'s notice of July 12, 1991, Pharaon held 85 percent of its shares "as a fiduciary for ICIC Overseas" and 15 percent for himself. BCCI lent him 8.5 million dollars through his account at the [[Banque Arabe et Internationale d'Investissement]] in [[Paris]], which telegraphed the California authorities that he held deposits of that amount, and the remainder came from the [[First National Bank of Boston]] against a letter of credit from BAII counter-guaranteed by BCCI. The Federal Reserve found that he had made false statements to the [[Federal Deposit Insurance Corporation]] by concealing that he acted as nominee for BCCI, and moved to bar him, Abedi, [[Swaleh Naqvi]] and Kemal Shoaib from banking.[^14][^15] On July 29, 1991, it fined him 37 million dollars.[^16]
+
+### CenTrust
+
+Pharaon told the [[Securities and Exchange Commission]] on August 12, 1987, that he had bought 16.9 percent of the common stock of CenTrust Savings of [[Miami]] and 24.4 percent of its Series One participating preferred stock, just under the 25 percent that would have meant legal control; the next day [[David L. Paul]] told journalists that Pharaon was "one of my very close personal friends." His CenTrust shares were likewise pledged to BCCI under a memorandum of deposit, and the report concluded that "at the very time that BCCI was under indictment in Tampa, Florida for money laundering, it had secretly acquired and controlled the largest S&L in Florida, CenTrust."[^14] On February 28, 1992, a federal grand jury in Miami indicted him with Paul and CenTrust's executive vice president William Christopher Berry: BCCI had bought about 27.7 million dollars of CenTrust debentures on May 24, 1988, CenTrust repurchased them two months later for 25 million dollars at par though their market value had fallen to about 24.7 million, and, according to the indictment, "the repurchase price was $331,500 greater than what BCCI had paid and Pharaon kept the difference." Attorney General [[William Barr]] called the indictment "another step in the Justice Department's effort to track down and prosecute allegations of crimes related to BCCI."[^17] On July 29, 1992, he was also named in the New York County indictment of [[Clark Clifford]], [[Robert Altman]], Abedi, Naqvi and [[Faisal Saud al-Fulaij]].[^18]
 
 ### Footnotes
 
@@ -38,3 +82,9 @@ Pharaon was indicted by the [[Department of Justice]] in 1992 for his role in th
 [^10]: Beaty, Jonathan and Gwynne, S. C. *The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI*. New York: Random House, 1993, p. 85.
 [^11]: Beaty, Jonathan and Gwynne, S. C. *The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI*. New York: Random House, 1993, p. 221.
 [^12]: Beaty, Jonathan and Gwynne, S. C. *The Outlaw Bank: A Wild Ride into the Secret Heart of BCCI*. New York: Random House, 1993, p. 394.
+[^13]: Kerry, Senator John, and Senator Hank Brown. *The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate.* December 1992, ch. 6, "BCCI in the United States: Initial Entry." https://irp.fas.org/congress/1992_rpt/bcci/06early.htm
+[^14]: Kerry, Senator John, and Senator Hank Brown. *The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate.* December 1992, ch. 7, "BCCI in the United States: Later Acquisitions." https://irp.fas.org/congress/1992_rpt/bcci/07later.htm
+[^15]: Board of Governors of the Federal Reserve System, *In the Matter of Ghaith R. Pharaon, Agha Hasan Abedi, Swaleh Naqvi, and Kemal Shoaib,* Docket Nos. 91-037-E-I1 to I4, Notice of Intent to Prohibit, July 12, 1991. https://www.federalreserve.gov/supervisionreg/files/19910712.pdf
+[^16]: Kerry, Senator John, and Senator Hank Brown. *The BCCI Affair: A Report to the Committee on Foreign Relations, United States Senate.* December 1992, ch. 12, "BCCI and the Regulators." https://irp.fas.org/congress/1992_rpt/bcci/12reg.htm
+[^17]: "Former CenTrust CEO, two others indicted," United Press International, February 28, 1992. https://www.upi.com/Archives/1992/02/28/Former-CenTrust-CEO-two-others-indicted/5853699253200/
+[^18]: "Clifford, Altman indicted in BCCI bank fraud," United Press International, July 29, 1992. https://www.upi.com/Archives/1992/07/29/Clifford-Altman-indicted-in-BCCI-bank-fraud/5122712382400/