Fraud was rampant at Kabul Bank—and a new report shows how deeply the corruption went. Indeed, "from its very beginning, the bank was a well-concealed Ponzi scheme," says an audit obtained by the New York Times. The bank's primary purpose, the audit suggests, was financial gain for Hamid Karzai insiders, who garnered depositors' cash. Among the alarming details, via the Times: The bank, which officials seized in 2010, used at least 114 rubber stamps from fake companies on forged documents. Loan books were "almost entirely fraudulent," but the bank's auditors at the time raised no questions about them.
Meanwhile, some 92% of the bank's loan portfolio went to just 19 people and firms, all interconnected, the audit says. "We never imagined that the criminality was as deep as it was, that it was so widespread and that it included high-ranking officials and their relatives," says a former governor of Afghanistan's central bank. Brothers of both Karzai and another top official saw a windfall from the bank, but the biggest profiteers were the bank's owners, poker champ Sherkhan Farnood and his former bodyguard. Keeping two sets of books, the owners used bank cash to buy property and designer clothing; the two are currently on trial. Karzai has urged further investigation to track down lost money. Click through for more on the fallout from the scandal.