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UNITED STATES v. BCCI HOLDINGS

August 19, 1993

UNITED STATES OF AMERICA
v.
BCCI HOLDINGS (LUXEMBOURG), S.A., BANK OF CREDIT AND COMMERCE INTERNATIONAL, S.A., BANK OF CREDIT AND COMMERCE INTERNATIONAL (OVERSEAS) LIMITED, INTERNATIONAL CREDIT AND INVESTMENT COMPANY (OVERSEAS) LIMITED, Defendants.



The opinion of the court was delivered by: JOYCE HENS GREEN

 Presently pending are the United States' motions to dismiss the petitions for hearings to adjudicate interests in forfeited property filed by The Bank of New York ("BONY"), Credit Suisse, The Industrial Bank of Japan ("IBJ"), and Shaw, Pittman, Potts & Trowbridge ("Shaw, Pittman"). Upon consideration of the motions to dismiss, all filings relating thereto, and oral argument presented at the June 4, 1993 hearing, the motions are granted and the petitions are dismissed.

 BACKGROUND

 On January 24, 1992, this Court, following findings of fact and conclusions of law with supporting reasons made in open court, accepted the pleas of guilty of the four corporate defendants (collectively "BCCI") and the plea agreement between them and the United States of America. Thereupon, and in accordance with 18 U.S.C. § 1963, an Order of Forfeiture was entered. Paragraph 1(e) of the Order provides that the corporate defendants named in this action shall forfeit to the United States ownership interests in all property located in the United States, including, without limitation, real property and all tangible and intangible personal property, however held, whether subsequently identified, determined or discovered in the course of the ongoing liquidation proceedings described therein or otherwise identified, determined, or discovered in any manner at any time, but not property that may be brought into the United States by or on behalf of court-appointed fiduciaries of BCCI in the course of the management or disbursement of the liquidation estates as described in the plea agreement. Attached to the January 24, 1992 Order as Exhibit A was a list of specific BCCI accounts, with corresponding numbers, names, and approximate balances, which the United States Marshals Service was directed to seize forthwith. Because the government was unable to verify certain information concerning additional forfeitable accounts at the time the Order of Forfeiture was entered, the Court issued a supplemental Order on January 31, 1992 which directed immediate seizure of the specific assets listed therein.

 In satisfaction of 18 U.S.C. § 1963(1)(1), and to inform third parties of potential rights to seek recovery of assets declared forfeited, the United States published notice of the Order of Forfeiture, as amended, during the period between February 13, 1992 and March 27, 1992 in eleven major United States newspapers including the Wall Street Journal, the New York Times, the Chicago Tribune, and the Los Angeles Daily Journal. See Government's Compliance with Order of May 8, 1992, filed May 12, 1992. In addition, personal notice was sent to over 340 persons and entities as late as April 3, 1992. Id.

 On March 11, 1992, BONY filed a petition to recover lost income from a commercial lease it entered with the New York Agency of defendant BCCI, S.A. ("the Agency"). BONY asserts that as of the date its petition was filed, its claim was worth approximately $ 6.6 million, the anticipated value of the lease from the month following the filing of the petition until the expiration of the lease in December 31, 1998. BONY acknowledges that the Superintendent of Banks of the State of New York has occupied the leasehold in connection with the liquidation of the Agency, has made monthly payments for its enjoyment of the premises, and is expected to continue to make such payments, at least for the short term. The petitioner therefore concedes that any award it might receive in this action should be adjusted downward to reflect payments made by the Superintendent. *fn1"

 IBJ filed its first petition on March 18, 1992 claiming interests which also arise from an uncompleted foreign currency swap. The petition states that on July 2, 1991, IBJ and BCCI, S.A. - Tokyo entered into an agreement whereby IBJ would transfer yen 4.4 billion to BCCI's account at the Dai-ichi Kangyo Bank, Ltd. in exchange for the transfer of $ 32 million from BCCI, S.A. - Tokyo's account at BankAmerica International in New York to IBJ's account at Morgan Guaranty. The parties agreed that both transfers would be made on July 5, 1991, and although IBJ effectively transferred its yen 4.4 billion, BankAmerica refused to transfer BCCI, S.A. - Tokyo's $ 32 million in light of the global shutdown of BCCI instituted earlier that day. IBJ seeks to recover the $ 32 million which it never received.

 Shaw, Pittman filed its first petition on April 1, 1992. The law firm alleges that it was retained by three of the corporate defendants to represent Swaleh Naqvi, their former acting Chief Executive Officer, with respect to various matters including investigations conducted by federal and state authorities relating to the defendants' relationship with Credit and Commerce American Holdings, N.V., the ultimate parent of First American Bankshares, Inc. It is claimed that from May 14, 1991 through February 29, 1992, the firm provided services to Mr. Naqvi worth almost $ 300,000 but has received only a $ 20,000 retainer payment. Shaw, Pittman seeks to recover the balance owed by BCCI for the legal services performed.

 In accordance with a briefing schedule set by the Court, the government filed a motion to dismiss all four petitions. Oppositions and a reply were submitted, and Credit Suisse and IBJ filed surreplies as well as notices of new authority in support of their oppositions.

 On June 24, 1992, the government filed a Motion to Amend Order of Forfeiture to Include Additional Property, seeking forfeiture and seizure of assets in newly discovered bank accounts held in the names of the corporate defendants, proceeds from the sale of a condominium purchased with resources provided by a corporate defendant, money remaining in a "BCCI Legal Fund" established by one of the corporate defendants for the defense of its employees' legal interests, a bankruptcy distribution to one of the corporate defendants, and assets held at various New York financial institutions in the name of ICIC Investments Ltd., a sibling corporation of defendant ICIC (Overseas) Ltd. The Court granted the government's motion and issued an Order of Forfeiture on July 29, 1992. The United States subsequently provided notice of the Order to potential claimants. *fn2"

 In September 1992, IBJ and Shaw, Pittman filed second petitions asserting interests in funds declared forfeited in the July 1992 Order of Forfeiture. These second petitions incorporated by reference the earlier filings, and differed from the first petitions only by requesting that the relief sought be satisfied from the newly obtained pool of funds. The government filed a motion to dismiss the second petitions, which became ripe in late April 1993. By Order dated May 18, 1993, the Court invited, though did not require, oral argument on the motions to dismiss. Credit Suisse and IBJ accepted the invitation, and argument was heard on June 4, 1993.

 DISCUSSION

 Title 18, United States Code, § 1963 sets forth an orderly procedure by which third parties seeking to recover interests in forfeited property may obtain judicial resolution of their claims. The provision granting standing to parties seeking to ...


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