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Lebanon's Bernie Madoff

A wealthy businessman with close ties to Hezbollah has been charged with stealing millions in a Ponzi scheme.

“This guy had credibility with people because of his political connections,” the banker familiar with the case said. “He wasn’t a member, but he was very close to [Hezbollah], so this is why you see that all his victims were allies, or members of this political party.”

Hezbollah's leader, Hassan Nasrallah, even felt it necessary to address the scandal in a televised speech in early September, saying less than $4 million was invested by Hezbollah officials. But the losses reportedly reach into the hundreds of millions of dollars among the group’s supporters. In the southern Lebanese village of Toura, residents say up to 60 percent of the town invested with Ezzedine.

“In one year he gave returns from 60 to 80 percent,” said N. Chour, a resident of Toura who invested $100,000 with Ezzedine only three months ago because of the exceptionally high returns, and who asked that only his first initial and last name be used.

Chour said the $100,000 he invested with Ezzedine was saved up over 14 years working various jobs in the Ivory Coast. He is growing less optimistic by the day of ever getting the money back.

“We are waiting to see if there is any solution, it’s very difficult now,” he said. “Until today we don’t know what happened to [Ezzedine] or where the money went. Was he a crooked man or a person hit by the world financial crisis? We are asking this question still and no one is giving us an answer. Not the Lebanese state or any other person.”

It appears that no one was asking questions about Ezzedine’s too-good-to-be-true returns on investments when the money was rolling in from what many assumed was his involvement in gold, oil and international commerce. The rumors of 25 to 60 percent returns on investments were so widespread, and believed, that some Lebanese gave Ezzedine their entire life savings or borrowed money to invest with him. “There are people who sold their gold, mortgaged their house and their land to get money from the bank [to invest with Ezzedine],” Chour said. He says many people invested and trusted Ezzedine because he was “known to be close to Hezbollah.”

Hezbollah gained many supporters based on its reputation for honesty and transparency in a governing system rife with corruption and shady business dealings. Ezzedine was also regarded as a devout Shiite Muslim, running the Bab el-Salam travel agency for the religious pilgrimages to the Muslim holy cities of Mecca and Medina, and the Dar al-Hadi publishing house, which published religious texts and Hezbollah material.

Hezbollah flags adorn several buildings Ezzedine funded and built in this hometown of Marroub, just a mile from Toula, including two new handsome mosques, a new municipal building and a soccer stadium. Here, hundreds more people invested with Ezzedine. Hussein Ezzedine, Marroub’s city administrator and a distant relative of Salah Ezzedine, says people here lost millions of dollars, but most are still reluctant to call him a thief.

http://www.globalpost.com/dispatch/lebanon/090918/lebanons-bernie-madoff