The largest corruption probe in Afghanistan’s history is going to turn its focus on the United States.
More than six years after the collapse of Kabul Bank, looted to the tune of nearly a billion dollars by its owners and a cadre of political elites, Afghanistan’s President has enlisted the help of a US government watchdog to track down stolen funds.
In a speech to the University of Pittsburgh on Wednesday, the Special Inspector General for Afghanistan Reconstruction (SIGAR) John Sopko revealed he has been approached by President Ashraf Ghani to assist in efforts to “repatriate the funds stolen from the Kabul Bank by way of fraudulent loans.”
“Especially funds that have been moved to the United States,” Sopko noted during an address on corruption in the war-torn country.
He said Ghani requested that SIGAR join a new task force made up of the Afghan Ministry of Finance, the Kabul Bank Asset Recovery Commission, and the Attorney General’s office.
“[Ghani] told me at our most recent meeting that SIGAR would have full access to the relevant banking and financial records,” Sopko stated, describing the overture as “positive steps.”
Established in 2004 as the first private financial institution in Afghanistan, Kabul Bank became instantly popular in a country with a sudden influx of Western investment and development cash.
But it failed in 2010, after the country’s central bank uncovered breathtaking fraud. The moneylender’s owners fleeced the equivalent of about one-twelfth of Afghanistan’s GDP, doling out the cash to friends and associates.
Members of former Afghan President Hamid Karzai’s administration and family were implicated in the scam. The bank’s founder Sherkhan Farnood, a former professional poker player, and CEO Khalil Ferozi were sentenced to 15 years in prison.
They have since received lenient treatment. The New York Times reported that under a deal arranged with the Afghan government, Ferozi only serves his sentence at night. During the day, he’s allowed to go into his offices and handle investments that that earn him profits. The rationale behind the move is that it helps Ferozi payback the $137 million that he has been required to pay Afghanistan.
In it’s story on Ferozi, the Times also noted last year that less than half of the $988 million stolen from Kabul Bank has been recovered.
