KABUL -- A special tribunal in Afghanistan has sentenced two senior Kabul Bank executives to five years in prison each for massive fraud that brought on the collapse of the country's largest bank in 2010.
Renamed New Kabul Bank, the financial institution was later bailed out by the government.
On March 5, the Kabul Bank Special Tribunal declared the bank's former chairman, Sherkhan Farnud, and a former chief executive officer, Khalilullah Ferozi, guilty of stealing more than $800 million.
Farnud and Ferozi were also ordered to repay $278 million and $530 million, respectively.
Addressing the court, Farnud accused Haseen Fahim, the brother of Afghan Vice President Mohammadqasim Fahim, of being one of the key organizers behind the scheme. Fahim was absent from the trial.
Nineteen other defendants were also sentenced to between two and four years in jail.
Among those sentenced in absentia was former central bank Governor Qadir Fitrat, who has fled to the United States. He was sentenced two years in jail for abuse of authority and failing to report the scam.
The defendants can still appeal the verdicts.
These are the first convictions handed down by the special tribunal since it was set up by the Supreme Court last year to deal with the case, which has provided a stage for critics of the government’s failure to tackle corruption.
Big Player
Kabul Bank (aka Kabulbank) handled about one-third of Afghanistan’s banking and most of the government payroll, including salaries for civil servants.
It issued huge unsecured, undocumented loans to some of its shareholders, including ministers, President Hamid Karzai's elder brother Mahmood, and other powerful members of the country's elite.
A forensic audit financed by international donors detailed ways that money from fraudulent Kabul Bank loans ended up in accounts in more than two dozen countries for the benefit of bank managers, their friends, and relatives.
The loss and related bailout consumed around 5 percent of Afghan gross domestic product.
A former U.S. ambassador to Afghanistan described the institution as a "giant looting scheme" and a "shell game."
Renamed New Kabul Bank, the financial institution was later bailed out by the government.
On March 5, the Kabul Bank Special Tribunal declared the bank's former chairman, Sherkhan Farnud, and a former chief executive officer, Khalilullah Ferozi, guilty of stealing more than $800 million.
Farnud and Ferozi were also ordered to repay $278 million and $530 million, respectively.
Addressing the court, Farnud accused Haseen Fahim, the brother of Afghan Vice President Mohammadqasim Fahim, of being one of the key organizers behind the scheme. Fahim was absent from the trial.
Nineteen other defendants were also sentenced to between two and four years in jail.
BEHIND THE CURTAIN: Report Claims Kabul Bank Fraud Sent Almost $900 Million Abroad
Among those sentenced in absentia was former central bank Governor Qadir Fitrat, who has fled to the United States. He was sentenced two years in jail for abuse of authority and failing to report the scam.
The defendants can still appeal the verdicts.
These are the first convictions handed down by the special tribunal since it was set up by the Supreme Court last year to deal with the case, which has provided a stage for critics of the government’s failure to tackle corruption.
Big Player
Kabul Bank (aka Kabulbank) handled about one-third of Afghanistan’s banking and most of the government payroll, including salaries for civil servants.
It issued huge unsecured, undocumented loans to some of its shareholders, including ministers, President Hamid Karzai's elder brother Mahmood, and other powerful members of the country's elite.
A forensic audit financed by international donors detailed ways that money from fraudulent Kabul Bank loans ended up in accounts in more than two dozen countries for the benefit of bank managers, their friends, and relatives.
The loss and related bailout consumed around 5 percent of Afghan gross domestic product.
A former U.S. ambassador to Afghanistan described the institution as a "giant looting scheme" and a "shell game."