Allegation of $400m Ponzi fraud leads to arrest in Lebanon

Investors in the Gulf may have lost hundreds of millions of dollars after the bankruptcy and arrest of a Lebanese businessman who was prominent in that country’s Shia community.

Salah Ezzedine, who ran a publishing house in Beirut’s southern Shia suburb and also owned a travel agency for pilgrims to Mecca, is alleged to have run a Bernard Madoff-style Ponzi scheme, according to an official at Lebanon’s central bank.

The official estimated the total amount of money lost in the scheme at about US$400 million (Dh1.47 billion), with half of that coming from investors in the Gulf, including Qatar and Kuwait, and the rest from investors in Lebanon.