Business Notes Scandals

Where was Ghaith Pharaon? U.S. authorities hunted for the globe-trotting Saudi financier last week after the Federal Reserve Board sought to fine him $37 million for serving as a front man for the notorious Bank of Credit & Commerce International. According to the Fed, Pharaon secretly used B.C.C.I. funds in 1985 to acquire Independence Bank of Encino, Calif., for about $23 million. To assure collection of the fine, a federal court froze Pharaon's U.S. assets, which ranged from a controlling interest in American Southern Insurance Co. to an 1,800-acre estate near Savannah.

Investigators are also probing allegations that Pharaon used B.C.C.I. funds to acquire the National Bank of Georgia for $18 million in 1978 and to invest $25 million in Miami's CenTrust Savings, which collapsed last year. Pharaon, whom the Federal Reserve wants to bar from U.S. banking, has denied any wrongdoing. But as authorities tried to serve him with a subpoena last week, he was believed to be sailing off the coast of Greece.