An investor who pooled money from poor villagers together to buy into Ezzedine’s scheme shows cheques that were written by Ezzedine as guarantees, none of which are valid today. Photograph by Bryan Denton
When Salah Ezzedine’s alleged pyramid scheme collapsed, it left thousands of Lebanese Shia with empty bank accounts – and presented Hizbollah with a crisis of authenticity. Joshua Hersh reports from Beirut.
In retrospect, there were plenty of signs that Salah Ezzedine’s investment operation did not entirely make sense. The promised rates of return – 40 per cent, 60 per cent, 80 per cent – would later get the most attention, but surely the paperwork ought to have set off alarm bells as well. By nearly all accounts, the sole record that Ezzedine provided to his many clients in Lebanon’s mainly Shia south was a cheque for exactly the amount they had invested with him. No quarterly statements, no balance sheets with pie charts and annuities and APRs. So long as they enjoyed collecting regular payments on their investment, all Ezzedine’s clients had to do was keep that cheque safely tucked away in their wallets. If they ever wanted out, they could take it down to the bank, and the money was theirs.
Of course, that was assuming there even was paperwork. Ezzedine, who was arrested in August for allegedly defrauding thousands of individuals, was so trusted in South Lebanon that, especially towards the end, few of his customers bothered to ask for anything like a receipt, or, for that matter, where the money was being invested.
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