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| Kabul Bank chiefs jailed for fraud | Kabul Bank chiefs jailed for fraud |
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| Two key players in a $900m (£594m) banking scandal in Afghanistan have each been sentenced to five years in jail, a relatively light sentence that is likely to fuel concerns about government indifference to rampant corruption in the country. | |
| Kabul Bank nearly collapsed in 2010 and has since been described by western officials as a virtual Ponzi scheme. In addition to their prison time, the chairman, Sherkhan Farnood, and chief executive officer, Khalilullah Ferozi, have been ordered to pay back a combined total of more than $800m, but there was no mention of punishment should they fail to produce the massive sum. | Kabul Bank nearly collapsed in 2010 and has since been described by western officials as a virtual Ponzi scheme. In addition to their prison time, the chairman, Sherkhan Farnood, and chief executive officer, Khalilullah Ferozi, have been ordered to pay back a combined total of more than $800m, but there was no mention of punishment should they fail to produce the massive sum. |
| Relative to the puny size of the Afghan economy, Kabul Bank was the biggest banking scandal the world has seen, and there were serious concerns it could destabilise the country's entire financial system. | Relative to the puny size of the Afghan economy, Kabul Bank was the biggest banking scandal the world has seen, and there were serious concerns it could destabilise the country's entire financial system. |
| The brothers of President Hamid Karzai and the vice-president, Mohammad Fahim, were among the bank's shareholders, although they have not been prosecuted. Handling of the high-profile case has been seen by the international community as a litmus test of Kabul's desire to rein in graft. | |
| "Kabul Bank is so symbolic, because it's two people [Farnood and Ferozi] who have been caught, bang to rights – they've been caught red-handed," William Patey, the then UK ambassador to Afghanistan, said last year. | "Kabul Bank is so symbolic, because it's two people [Farnood and Ferozi] who have been caught, bang to rights – they've been caught red-handed," William Patey, the then UK ambassador to Afghanistan, said last year. |
| "All the rest remains allegations and suspicions, so that's why it's a kind of litmus test. If you won't do these ones, what chance the rest?" | "All the rest remains allegations and suspicions, so that's why it's a kind of litmus test. If you won't do these ones, what chance the rest?" |
| The bank was set up in 2004. In 2007, an Interpol arrest warrant arrived with Afghan police, who did nothing about it. Fraud at the bank is believed to have begun in 2006, according to a public inquiry into the crisis. | |
| Farnood was already wanted by Interpol for illegal banking activities, organising a criminal group and money-laundering in Russia, while he was using bank money to buy luxury properties and helping other shareholders, friends and political connections line their own pockets. He has been ordered to repay $279m. | Farnood was already wanted by Interpol for illegal banking activities, organising a criminal group and money-laundering in Russia, while he was using bank money to buy luxury properties and helping other shareholders, friends and political connections line their own pockets. He has been ordered to repay $279m. |
| Ferozi was ordered to repay $531m. Both men said they would appeal against their sentences, which were announced by the judges on a special tribunal set up to handle the case after less than 10 minutes of deliberation. | Ferozi was ordered to repay $531m. Both men said they would appeal against their sentences, which were announced by the judges on a special tribunal set up to handle the case after less than 10 minutes of deliberation. |
| The ruling, which means the men will be back on the streets before the end of the decade, contrasts with other high-profile fraud cases, like that of disgraced US financier Bernie Madoff, who was sentenced to the maximum 150 years in prison for masterminding a $65bn fraud. | The ruling, which means the men will be back on the streets before the end of the decade, contrasts with other high-profile fraud cases, like that of disgraced US financier Bernie Madoff, who was sentenced to the maximum 150 years in prison for masterminding a $65bn fraud. |
| Although he stole more money and caused financial ruin or serious problems for many individuals, that Ponzi scheme was not considered a threat to the entire US economy. |