Last Update 22:17
Friday, 15 November 2019

Iran hit by $2.6 billion banking scam

A single man built a network targeting 8 banks over two years, forging letters of credit to purchase assets, with official saying arrests occurred before the media heard the story

AFP, Sunday 11 Sep 2011
Iran banking
Banking scam targeted eight institutions over two years, say local media (Photo: Reuters)
Views: 4092
Views: 4092

Several Iranian banks have been targeted in one of the biggest frauds in the Islamic republic's history, losing nearly US$2.6 billion in more than two years, media reports said Sunday.

The fraud was reportedly orchestrated by a single man, referred to as "Mr X" in Iranian media, who developed a network and used forged letters of credit to purchase assets, including one of Iran's largest steel production companies, Khuzestan Steel Company.

"Mr X" ran his master plan from June 2009 to last August, pocketing around 28 trillion rials (nearly $2.6bn) and also unsuccessfully attempting to form a new bank," said central bank chief Mahmoud Bahmani in remarks published Sunday.

Bank of Saderat CEO Mohammad Jahromi, whose organisation was one of the victims of the fraud, said seven other banks were also hit.

Head of general inspection organisation, Mostafa Pour Mohammadi, labelled the fraud "the most unprecedented financial corruption case" in the Islamic republic's history. He did not elaborate.

Influential conservative lawmaker Ahmad Tavakoli said the case represented "a terrible corruption disease (lurking) in (Iran's) banking system and administrative apparatus."

On Wednesday, judiciary chief Ayatollah Sadeq Larijani said "the people involved in this case have been arrested" before the media got wind of the story. He did not elaborate.

The Germany-based corruption watchdog Transparency International last year ranked Iran 146th out of 178 countries on its annual list.

Short link:


Ahram Online welcomes readers' comments on all issues covered by the site, along with any criticisms and/or corrections. Readers are asked to limit their feedback to a maximum of 1000 characters (roughly 200 words). All comments/criticisms will, however, be subject to the following code
  • We will not publish comments which contain rude or abusive language, libelous statements, slander and personal attacks against any person/s.
  • We will not publish comments which contain racist remarks or any kind of racial or religious incitement against any group of people, in Egypt or outside it.
  • We welcome criticism of our reports and articles but we will not publish personal attacks, slander or fabrications directed against our reporters and contributing writers.
  • We reserve the right to correct, when at all possible, obvious errors in spelling and grammar. However, due to time and staffing constraints such corrections will not be made across the board or on a regular basis.

© 2010 Ahram Online.