Category: Kabul Bank

Was Kabul Bank a Ponzi Scheme?

“Kabul Bank was never a Ponzi scheme. It had elements of a Ponzi scheme, but it was not a bonafide Ponzi scheme. Kabul Bank was a case of embezzlement. It was a straight theft of the public’s money.”

Kabul Bank’s True Borrowers’ List

“…the true borrowers’ list used Microsoft Excel. Q gave me a copy of the true borrowers’ list. It is the basis for most of the figures in this paper.”

Kabul Bank, the Central Bank, and the Rise of Khaliullah Fruzi

…Kabul Bank paid a bribe to the central bank for every annual audit, every policy approval, and every administrator that was confirmed. …In 2005, Fruzi became a Kabul Bank borrower. Q says that Fruzi used to come to the bank shabbily dressed and arriving in taxicabs….

Kabul Bank’s Golden Age

“…by June 2006 …the bank now had over 165,000 customers, 440 employees, and eight branches. It had established Internet and mobile banking, was a principal agent in Afghanistan for Western Union, completed its first Automated Teller Machine (ATM) transaction…”

Kabul Bank and Pamir Airways

*Foreword by Michael Semple from Harvard Kennedy School* …Sherkhan and Fruzi pressed on with the purchase of additional aircraft via the illegal loan route. They spent $34 million for three additional 737-400s and $12 million for five Russian-made Antonov planes…

How They Robbed Kabul Bank

…Johnson advised Sherkhan to split the large loans into smaller ones and to create shell companies –referred to as “fictitious” companies in the media- that would receive the loans. Shell companies are legal entities, since they exist on paper, but have no actual business operations, except perhaps to serve as a conduit for money transfers. The shell companies hid the borrower’s true identity.