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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)
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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.

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