FEDERAL RESERVE SLAPS BANK WITH $200M FINE PROSECUTOR OBTAINS FRAUD INDICTMENT AGAINST BCCI, FOUNDER.(Main)

Byline: Marcy Gordon Associated Press

The Federal Reserve acted Monday to levy a record $200 million fine against the Bank of Credit and Commerce International, while New York - in a separate action - indicted the huge bank and its Pakistani founder for what a prosecutor termed "the largest bank fraud in world financial history."

Manhattan District Attorney Robert Morgenthau announced an indictment against BCCI, founder Agha Hasan Abedi, another top executive and four affiliate institutions on charges of defrauding investors, falsifying records and stealing more than $30 million.

Almost simultaneously in Washington, the Federal Reserve announced it is seeking a $200 million fine against BCCI and an order barring nine persons tied to the bank from involvement with U.S. banking organizations.

The actions in New York and Washington follow the seizure of BCCI offices around the world on July 5 amid allegations of massive fraud and laundering of profits from drug trafficking.

The Fed said its decision was "based on evidence of secret arrangements that were made between …