On the trail of Gokal

On the trail of Gokal

A team of lawyers, accountants and police spent five years trackingthe man behind BCCI's missing millions. Rik Workman reports on an SFOsuccess.

It took five years of painstaking investigation, a seven-month Old Bailey trial and a remarkable twist of fate to bring former shipping tycoon and fraudster Abbas Gokal to justice.

On Thursday 8 May 1997, nearly six years after the corrupt Bank of Credit & Commerce International closed its doors for the last time, Gokal was sentenced to 14 years in prison for his part in the massive $1.2bn fraud.

It was the heaviest sentence ever achieved by the Serious Fraud Office.

But there were many times when the team working on the case feared Gokal would elude them forever.

The SFO turned its investigations to BCCI’s loans to Gokal’s Geneva-based Gulf Group in September 1992 (it had already pursued a number of other lines each involving a different suspect). The inquiry focused on a conspiracy between members of senior management. The initial problem was that none of the suspects was available to the UK authorities.

The fugitives

The BCCI managers had all been based in London at 100 Leadenhall Street and included founder Agha Hasan Abedi, CEO Swaleh Naqvi and two others who managed the ‘Gulf fraud factory’. When the bank closed down, the conspirators fled to Pakistan or were held in Abu Dhabi – BCCI’s headquarters since 1990. Gokal was based in Geneva with his two brothers and right-hand man Shahveer Byramji. They too escaped to Pakistan, just before the Swiss police raided the Gulf offices.

Pakistan does not have an extradition treaty with the UK and Gokal had no intention of coming to London to face either BCCI’s defrauded customers or the SFO.

It soon became clear that this was the most complicated fraud ever investigated.

Early reports from BCCI auditors Price Waterhouse indicated that it had made massive loans to the Gulf Group via more than 700 offshore companies, many equipped with bogus or nominee shareholders, and false accounts and other data.

Unfortunately, the necessary bank records were scattered all over the world, most importantly in London, Grand Cayman and Abu Dhabi. The SFO needed the co-operation of the legal authorities in all three jurisdictions.

London presented no problems. BCCI’s liquidator Touche Ross (now Deloitte & Touche) was in control of the vast majority of the bank’s branches and provided the SFO with access to its records. Colleagues from Touche’s international firm had also taken over the Grand Cayman offices where they found another vital haul of banking documentation relating specifically to Gulf loans.

In Abu Dhabi, the authorities had sealed the BCCI headquarters, appointing their own receiver and detaining up to 14 senior managers. During its confidential investigations, PW gave code names – flowers, birds and plants – to each individual and corporation.

One office became known as ‘Kew’ because it contained such a rich supply of the most secret and potentially incriminating evidence, not just of the Gulf conspiracy but of many other activities. These were named the ‘Naqvi files’, after the CEO who had them in his close custody (and who is now serving 11 years in the US).

Abu Dhabi, though, presented one significant problem. While preparing to close down BCCI, the world’s banking regulators, including the Bank of England, the Institut Monetaire de Luxembourg (where BCCI had its corporate base) and the Cayman Inspector of Banks, had decided not to forewarn Abu Dhabi of their plans. At the time, it was felt the authorities there may have been aware of the bank’s activities for some years (despite the fact that BCCI had stolen up to $2.2bn from the personal deposits of the ruler of Abu Dhabi).

It became clear that the investigation’s progress would be severely limited without the Naqvi files and, maybe, Naqvi himself. The SFO rebuilt the damaged relations through negotiations in both London and Abu Dhabi and, in a true spirit of co-operation, the authorities there granted them access to the documents and the former chief executive.

Investigators for all seasons

There were other lengthy trips around the world. Grand Cayman was the most popular. Team members travelled there several times to examine and bring back Gulf records vital to the case. At the other end of the Celsius scale, a trip to review and compile documents from a police warehouse in Geneva meant dressing up like Arctic explorers to keep the chilling temperature at bay.

Another productive trip was to New York. In order to confuse and deceive the auditors, Gulf had opened accounts at two New York banks – Security Pacific and French American Bank – through which to route the massive loans and launder the funds. Millions of dollars moved in a circular fashion to and from BCCI every day. Gulf’s fortunes had begun to founder as far back as the late 1970s. As the situation worsened, BCCI could neither publicly admit the full extent of its loans to the shipping group nor hope to reclaim them. So the New York accounts were at the heart of a conspiracy to fool the outside world that the bank and its customer were still financially credible. Getting hold of copies of these records was another key factor in the SFO’s success.

Suspects fall into SFO trap

During the early part of the Gulf investigation, only one or two of the potential defendants occasionally made visits to territories with which the UK had extradition treaties. However, once the case had been adopted, the investigating team understood that papers detailing the conspiracy would be put together and placed on the shelf ready in the event of any of the suspects travelling to a country within the reach of the SFO.

Throughout 1993 and early 1994, the case gradually came together until, in July 1994, we got the break we’d been waiting for.

On 14 July, City of London Police received information that Gokal was about to fly to New York to assist the authorities there. It was astonishing news. Of all the suspects still at large he was our prime target and one of those we had least expected to arrest. And here he was, about to leave the safety of Pakistan and travel covertly to New York. Ironically, Gokal hoped to cut a deal there to gain immunity from prosecution in exchange for information about US nationals. We had an opportunity to grab him on the way.

Over the next 24 hours, the police confirmed the flight details. They laid plans to intercept the plane when it landed at Frankfurt for refuelling.

And the SFO asked the German police to arrest Gokal.

The plane landed in Frankfurt on Monday 18 July. Passengers were requested to disembark but nobody matching Gokal’s description appeared. Was he actually on the flight? Detective Sergeant Doug Reeman, who had flown to Germany for the arrest, went on board and, sure enough, sitting in first class with his wife, there was Abbas Gokal. He was arrested and detained in a German prison to await extradition to the UK.

The SFO had their man. The years of hard work were not destined to remain on the shelf; we were heading for a courtroom confrontation.

Once Gokal arrived in the UK, we would only have 70 days in which to transfer the case from the Magistrates Court to the Central Criminal Court.

So the SFO investigation team had to work flat out against the clock if it was to avoid the most galling outcome which would have seen him released and free to return to Pakistan.

Following his extradition from Germany, Gokal was remanded in custody to Brixton jail and in February 1995 was charged on two counts; one of conspiracy to account falsely and the other of conspiracy to defraud.

The first suggested trial date was September 1995. But this was put back twice to allow more time for the defence solicitors to examine the disclosable evidence and prepare their case. Eventually, the trial began in September 1996. Meanwhile the SFO continued its investigation into the conspiracy and also submitted new material to the court. This included evidence regarding the personal lifestyle of Gokal and his family – a lifestyle which involved luxury houses, ski chalets and cars.

Stephen Davies, the investigating team’s senior accountant and now a manager in the financial services division of Goldman Sachs, returned to the inquiry to make the all-important expert witness statement. This demonstrated the false nature of so much that had transpired between the bank and the Gulf Group. Kevin McDonald, initially a secondee to the SFO but later full-time at the office, was appointed as the trial accountant.

Uniquely in this sort of case, he sat beside counsel to provide on-the-spot accountancy advice throughout the many preparatory hearings and 122 days of the trial.

A complex prosecution

During this last year, my colleagues and I created a computer graphics package to help present the mechanics of an extremely complex fraud to the judge and jury. Chris Cass, a senior SFO accountant (now with the Securities & Futures Authority), had the unenviable task of explaining, initially in his statement and then at length before the jury, the labyrinthine routings of millions of BCCI dollars.

Nineteen court days were lost to illness. Two jurors had to retire. The team held its breath because just one more drop-out would have led to a retrial. In the end, however, after four days of deliberation the depleted jury of ten returned a unanimous guilty verdict against the defendant on both counts.

As well as his 14-year prison sentence, the court ordered Gokal to pay a u2.9m confiscation order.

The successful outcome of this case was due to the efforts of all the inquiry members – the police, lawyers, counsel and the backup support – and, in particular, the way they worked together as a team.

Mr Justice Buxton said it himself during sentencing remarks: Gokal’s attempt to evade justice ‘might indeed have succeeded had it not been for the meticulous and determined way in which this case has been investigated and presented by the Serious Fraud Office and the City of London Police’.

Rik Workman is a manager in the litigation support department of Neville Russell

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