Fraud Friday — Crony Capitalism, Afghan Style

Approaching $1 billion in losses, Kabul Bank serves as the poster child of how the good intentions of the United States was hijacked by the powerful elite in Afghanistan.

Reports the New York Times, when the bank was seized in 2010 more than 92 percent of the lender’s loan portfolio — $861 million had gone to 19 related people and companies.

Among the largest beneficiaries were a brother of Mr. Karzai and a brother of First Vice President Muhammad Qasim Fahim.

“The owners kept two sets of books, and hid loans to themselves and their shareholders by taking them in the names of friends, relatives and even domestic servants, according to the audit and Afghan officials. They grouped related loans together to better keep track of who owed what. Hundreds of millions of dollars in illicit loans were routed to Dubai through a money exchange controlled by Mr. Farnood, who founded the bank.

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