Deak & Co
Deak & Co
Some of America’s best known corporations and banks have allegedly acted on behalf of the CIA, moving its money and providing cover for its agents, whether legal or illegal. It was a former operative for the OSS (predecessor of the CIA), Nicholas Deak, who, shortly after the Second World War, founded a currency and bullion trading company that soon became the largest in America. During the Vietnam War, Deak provided the CIA with black market Vietnamese piasters in exchange for dollars deposited with it in the US. (Similarly, Bernie Cornfeld’s Investors’ Overseas Services, with its specialists in underground financial movements, allegedly co-operated with the CIA, which used its banks to run money and apparent employment as mutual-fund salesmen as cover for agents. Included also were Michele Sindona, Banca Privata Finanziaria and Continental Illinois). The expansion of Deak & Co resulted from the direct outgrowths of former intelligence agency proprietaries. When Edwin Wilson was ostensibly forced out of the CIA in 1971 for using CIA proprietaries for private business, he was taken under the wing of the Office of Naval intelligence. There he operated a commodity trading firm, Consultants International, which provided cover for global intelligence gathering and when he was sacked by the ONI in 1977, he took Consultants International with him into the private sector. He had operated out of London, the world centre for arms-trafficking and was finally arrested and jailed in 1981. The darkest days of the CIA were in the early seventies, which involved Nugan and Hand in Australia which, with its Asian influence was at the centre of trafficking. By the time of Deak & Co’s collapse it was parent to a global empire based on currency and bullion dealing, with a forceful presence in the Hong Kong gold market, and a Swiss bank, the Foreign Commerce Bank of Zurich, in its stable. The great bulk of deposits came from Latin America. Deak was at the centre of the capital flight business.
Also shaken by the crisis were Deak’s Hong Kong affiliates, which had been important for Nugan-Hand’s dealings in the heroin trade paper market and in the Lockheed bribery operation. In Hong Kong there were five subsidiaries, of which the most important were a DTC, Deak-Perera Finance, and a bullion dealership, Deak-Perera Far East. The company was also present in Macao through Deak & Co Macao Ltd (note - involvement of Stanley Ho and the $3 million funding provided to Joseph Madol in 1996 to assist in concluding his $1.2 billion claim against this estate??).
Between Deak-Perera Far East and the Macao affiliate some odd transactions took place. Deposits were solicited in Hong Kong for transfer to Macao, though neither company had a DTC license. When the American subsidiaries filed under US bankruptcy law, the Hong Kong depositors panicked and tried to withdraw their money. It did not exist, at least not on the books of the Macao company that was supposed to be its custodian. Inquiries as to its whereabouts were hampered by the disappearance of the managing director. The Macao operation was closed. In Hong Kong, the government revoked the license of Deak-Perera Finance, a court ordered the liquidation of Deak-Perera Far East, and the police issued an arrest warrant for Nicholas Deak. And some quick changes of hand for the Foreign Commerce Bank of Zurich set off another tiff between Switzerland and the US Justice Department seeking to subpoena the bank’s records of transactions of US clients.
In the autumn of 1985 Nicholas Deak was shot dead. The remnants of the empire went up for grabs. Amongst the list of bidders for Deak’s Zurich-based private bank, namely Foreign Commerce Bank, was American International Group, Inc and Beirut-based bank, Bank El-Mashreq, a financial holding company, the company that Robert Vesco had attempted to acquire. The Foreign Commerce Bank was involved in securities, currency and metals trading. Deak & Co had owned 86% of the bank, with an additional 9% owned by Mr Deak himself. But finally Deak & Co emerged from under Chapter-Eleven proceedings, paying off its creditors at 48 cents on the dollar, in the hands of a Pacific-based business group intent on plunging the rehabilitated company into the booming North American market in “financial services”.