MOHAMMED HAMMOUD: BCCI'S FLEXIBLE

FRONT-MAN

Introduction

As the BCCI scandal has unfolded, Mohammed

Hammoud has emerged as a shadowy figure with
close ties to a number of powerful American political
and government figures.

During the 1980's, Hammoud acted as a front-man or

nominee for BCCI, became an owner of BCCI and of
CCAH, the holding company for First American,
borrowed over $110 million from BCCI, much of
which he failed to make interest payments on, and
made numerous investments in the United States
with funds provided him by BCCI, and in one case,
backed up by guarantees from First American.

During the same period, Hammoud, a little known

Lebanese merchant, also purchased the shares in
First American held by Clark Clifford and Robert
Altman; had his U.S. real estate investments
managed by the current U.S. Ambassador to Bahrain,
Charles W. Hostler; had contact with officials from the
State Department concerning the release of U.S.
hostages from Beirut and other issues pertaining to
Lebanon, and developed a personal and business
relationship with Michael Pillsbury, a former assistant
Undersecretary of Defense and Senate staff
assistant.

After BCCI's indictment in October, 1988 by the U.S.

Attorney in Tampa, Hammoud also worked closely
with BCCI's

criminal defense team in Washington to determine

whether it would be possible to "reverse Tampa" by
meeting with higher-level federal officials in
Washington. In the fall of 1989, Hammoud actually
met with high-ranking officials at Treasury and Justice
concerning the BCCI case, and had ongoing contact
with Senate staffer Pillsbury seeking to assist BCCI in
defending itself against its criminal case.(1)

Hammoud's multiple roles in connection with BCCI

continued until his sudden death on May 3, 1990, at
the very time that investigations of BCCI were
intensifying. After his death, press accounts raised
questions as to whether his death was real or staged,
and law enforcement indictments have described
Hammoud's current status as "reportedly dead."(2)

Who is Mohammed Hammoud?

Little is known of Hammoud's background, although

Abdur Sakhia, the former general manager for BCCI
N.Y., described Hammoud as a merchant who at one
time operated a stall in one of Beirut's open-air
markets:

My memory goes back about 27 or 28 years when I

went first to Beirut. He was a small time money
changer.(3)

In interviews with Subcommittee staff, Nazir Chinoy,

the BCCI general manager in Paris, remembered
Hammoud as:

A short man, not a very impressive personality. . . My

impression of Hammoud, to me Hammoud was not
rich. Pharoan had physical power from his bearing his
confidence. Hammoud was a slimey sort of a chap,
not a forceful personality. Would Hammoud
understand foreign policy? I do not think so. He was
not a worldly man. Pharoan yes. Hammoud no.(4)

In testimony before the Subcommittee in 1991,

Massihur Rahman, BCCI's former chief financial
officer, described Hammoud as "a medium sized
businessman." BCCI's files indicate that Hammoud's
wealth grew exponentially, and inexplicably, during
the 1980's, at a clip of almost $5 million a year. By
1989 he is listed as owning assets in excess of $35
million.(5) Nevertheless, according to Chinoy,
Hammoud did not give "the impression of being an
extremely rich man from his clothes and general
behavior."(6)

At some point during the 1970's Hammoud became

very close to the top management at BCCI. Naqvi
had worked in Lebanon and BCCI had branches there,
but the Subcommittee has been unable to determine
who originally introduced Hammoud to BCCI.
Hammoud is described in a 1983 BCCI memorandum
as "a very good customer of the BCC Group," who
"possesses large means."(7) By the time of his death
in 1990, Hammoud was a major shareholder in the
bank, owning 2,646,184 shares, according to a
February, 1990 report by BCCI's outside auditors,
Price Waterhouse.

According to Rahman, "[h]e seemed to be very close

to some of our executives. And he has been used
obviously for taking loans and doing things."(8) Later
in his testimony Rahman characterized Hammoud as
the most flexible of BCCI's nominees.

Chinoy echoed the testimony of Rahman, stating that

Hammoud had "a very special relationship" with the
bank. Chinoy recalled how Hammoud had borrowed
about $100,000 from the Paris branch and was not
servicing the loan. When Chinoy wrote Hammoud
asking that the loan be repaid, Chinoy was rebuked
by his superiors in London and told he "should not
write abusive letters to good clients who had helped
the bank." Chinoy explained that he later wrote the
loan off in three separate installments.(9)

The loan to Hammoud by BCCI's Paris branch pales in

comparison to the massive loans Hammoud received
from BCCI elsewhere. As of April 1990, Hammoud
owed over $110 million dollars to BCCI and its
affiliate, ICIC, Grand Caymans, As Price Waterhouse
concluded in the report, "there remain too many
unanswered questions about Mr. Hammoud
[including] his connection with delinquent accounts
of BCCI." At the time, Price Waterhouse expressed its
concern about the lack of evidence at BCCI that
Hammoud owned "any of the companies" he claimed
to own in connection with BCCI lending. (10)
 Hammoud's Real Estate Investments

Hammoud made real estate investments in the

United States through a series of companies:
Linden Investments, Copperwood, N.V.,
Marmaris investments, N.V., Eastward, N.V. and
Carlson Farms, Ltd. Ambassador Charles
Hostler, who advised Hammoud on his US
investments, referred to these companies as
"holding companies" for the properties.

Documents obtained by the Subcommittee

indicate that all of the companies were
probably front companies which Hammoud
established on behalf of BCCI. For instance in
November, 1978, Hammoud wrote to ICIC,
BCCI's "bank within a bank":

I have to request you to arrange on my behalf

for the incorporation of a company in Cayman
Islands with an authorized capital of
US$900,000.00 and Issued and Paid-up capital
of $US100,000.00. This company to be
incorporated with the name and style of
"Linden Investments Company Limited" is to
have as its principle objects investments in
immovable properties in the U.S.A. and other
places, either directly or through any of its
subsidiaries to be incorporated in such
countries where maximum tax benefits would
be available for such property investments,
and with such other objects as are usable and
necessary for such investment companies,
including borrowing powers.
You may appoint your own nominee directors
for the said Linden Investment Co. Ltd. and
transfer to their names such shares as may be
necessary according to the legal requirements.
The remaining shares may be held by you in
your name or in the name of any other
company as your nominee.

I hereby authorize you to appoint any agents

for the aforesaid purpose and to do, execute
and perform or cause to be done, executed and
performed all acts, deeds and things that may
be required or necessary in a fiduciary capacity
for the aforesaid purpose and to give any other
authority or writing that you may require or
deem necessary for this purpose.(11)

Hammoud's real estate investments include

property he purchased from a church in
Alexandria, Virginia, an office building in New
York, a building in Boston adjacent to Boston
Symphony Hall, and a development in the small
town of Sherman, Connecticut. All of these
investments were financed by BCCI and none
of the loans was ever serviced. Carlson Farms,
for instance, received a $1 million letter of
credit from BCCI secured by only the guarantee
of Linden Investments, which apparently held
no other properties.(12)

In his Senate testimony, Sakhia described the

Hammoud's real estate holdings in the US with
which he was familiar. According to Sakhia:

We did a loan to him from BCCI in New York,

which we were told from London to give that
loan in the first place.

In the second instance, when we had acquired

the property and we wanted to develop a
property in Washington, he contacted us to
make a construction loan-- which we refused to
do because we were not equipped to handle
constructions loans."(13)

Sakhia testified that he "completely refused to

do the second transaction," but that the
Central Credit Division in London ordered him
to the first transaction, which wound up being
"110% of the loan". Sakhia acknowledged that
the loan did not make business sense. (14)

After Sakhia refused to do the construction

loan, the Central Credit Committee in London
told its New York regional manager "[W]hy
don't you introduce him to First American,
because the property is in Washington. First
American is located in Washington and First
American is big in real estate loans." First
American subsequently issued a $4 million
letter of credit to Hammoud.(15)