Kabul Bank Honchos Punished for Fraud—Kind Of

Karzai brother conspicuously absent
By Kevin Spak,  Newser Staff
Posted Mar 5, 2013 9:34 AM CST
An exterior view of the Kabul Bank in the center of Kabul, Afghanistan, March 5, 2013.   (AP Photo/Anja Niedringhaus)

(Newser) – An Afghan court convicted 21 people for their involvement in the Kabul Bank scandal today, a development that would have been nigh-unthinkable not long ago in the notoriously corrupt country, the New York Times reports. But independent observers say the sentences were surprisingly light given the severity of the fraud uncovered, the AP reports—two top executives got only five years in prison, on crimes that could have carried 20-year sentences. And the Times notes that it's unclear whether bank founder Sherkhan Farnood and former CEO Khalilullah Frozi will actually go to jail or will just continue to live under house arrest (and host poker games).

And while they've been fined hundreds of millions of dollars each, there seems to be no way to legally require that they hand over the money. What's more, several of the biggest-name figures in the scandal—like Mahmoud Karzai, brother of President Hamid Karzai—were conspicuously absent, and some of those convicted were bank employees who will serve as much as 2.5 years but "benefited little" from their role, per the Times. A November report described Kabul Bank as being run like a Ponzi scheme, with deposits used to fund lavish villas in Dubai and hundreds of millions of dollars sent out of Afghanistan—some in airplane food trays. (Read more Kabul Bank stories.)

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