Funding siphoned off from Kabul Bank, Afghanistan’s largest bank, amounts to some USD1 billion, sources knowledgeable of the bank’s alleged fraudulent activities say.
The International Monetary Fund estimates that funding lost due to corrupt activities at the bank could amount to USD850 million.
Why the discrepancy in estimates?
The chairman of Kabul Bank is said to have purchased 20 condos in Dubai’s Palm Jumeirah Island, each worth USD7 million, according to Rachel Ehrenfeld of the blog “Big Peace.”
“He bought them in his personal name with depositors’ money. Now he says that he bought them for the benefit of ‘certain’ people who want to remain anonymous,” Ehrenfeld notes. “But it has been discovered that several Cabinet members have family members living in them, including Mahmoud Karzai, the president’s brother. This is but one example.”
The U.S. bank supervision assistance to the central bank does not include measures for detecting fraud, Ehrenfeld writes.
“We don’t want to offend the counterparts by including Criminal conduct prevention measures,” according to an officer of the U.S. Agency for International Development as quoted by Ehrenfeld.