MEPE

[HBendor]

'Hezbollah's Madoff' brings serious financial losses to top members

~By Avi Issacharoff, Haaretz Correspondent, and Agencies Last update - 05:08
07/09/2009
www.haaretz.com/hasen/spages/1112877.html

At least four senior members of Hezbollah suffered serious financial losses
as the result of embezzlement by the Lebanese Shi'ite businessman Salah
Ezzedine, according to the London-based newspaper Asharq Al Awsat. Ezzedine,
who has been dubbed "Hezbollah's Madoff," is suspected of embezzling more
than one billion dollars.

The four were identified as Mohammad Raad, head of the Hezbollah faction in
the Lebanese parliament, Hezbollah MPs Amin Shari and Hussein al-Hajj, and
Wafiq Safa, head of the organization's coordinating committee.

Safa was the person who handed over the bodies of missing Israeli soldiers
Eldad Regev and Udi Goldwasser, to the United Nations, during a 2008
prisoner swap between Hezbollah and Israel. At the time, he stood in front
of the Al-Manar television cameras and declared: "You will know immediately
what their fate was," as he pointed to the coffins containing the remains.

According to assessments in the Arab media and the news agencies, Ezzedine
succeeded in defrauding hundreds of investors out of sums totaling between
$600 million and $1.3 billion. He was arrested at the beginning of last week
after persuading a large number of investors - including businessmen from
Qatar and the Gulf states and thousands of villagers from southern Lebanon -
to transfer sums of money to him, which he promised to invest with returns
of 25-55 percent. After he declared bankruptcy, Ezzedine turned himself over
to the Lebanese authorities.

Abu Ponzi

Ezzedine, who was well known as an investor mainly among Lebanon's Shi'ite
community, is suspected of having used the money as part of a "Ponzi scheme"
in which he transferred the sums invested by new investors to the accounts
of more veteran investors, in much the same way as Bernard Madoff did in the
United States. It is believed that Ezzedine's family has escaped from
Lebanon.

Lebanese reports say that Ezzedine and his associates are being interrogated
at present but that no formal charges have yet been brought against them.
The Kuwaiti newspaper Al Watan reported last week that Hezbollah's losses in
the affair are estimated at some $680 million, a gigantic sum for the
organization, most of whose budget comes from Iran.

In the past decade, Hezbollah has succeeded in developing economic systems,
including drug and real estate deals that brought in good returns.

Ezzedine is the owner of the Dar Al-Hadi publishing company, one of
Lebanon's leading publishers of Shi'ite religious texts. It also publishes
the writings of Hezbollah officials and has shares in the children's
"Al-Hadi" television channel.

A Lebanese court on Thursday ordered the closure of the publishing house and
all 250 workers lost their jobs suddenly. Ezzedine was also involved in
arranging trips to Mecca. Ezzedine's money was invested in iron and energy
companies and he lost a fortune when the price of oil plummeted.

"Everyone invested with him, everyone," said the owner of a grocery store,
Muhammed Shur, in an interview with Al-Jazeera Television. "He was supposed
to be a religious man and gave a lot of money to charity." He said he had
placed his family's entire savings, $45,000, in Ezzedine's hands. "You can
go through this village one by one," he added. "Some of the people even
mortgaged their homes to invest with him."

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