Hezbollah embarrassed by fraudster

Local press have dubbed Salah Ezzedine the ‘Lebanese Madoff’

Hezbollah embarrassed by fraudsterAdd Salah Ezzedine to the growing list of fallen financiers around the world. On Sept. 12, Lebanese authorities charged the prominent billionaire with fraud, after hundreds of millions of investors’ savings disappeared in an alleged Ponzi scheme. Ezzedine could be facing up to 15 years in prison. The amount of money that Ezzedine squandered is astonishing. More intriguing, though, is the roll of clients whom he defrauded.

Ezzedine declared bankruptcy in late August, but his troubles started in earnest after he bounced a $200,000 cheque made out to Hussein Hajj Hassan, a Hezbollah MP and adviser to the party’s leader, Hassan Nasrallah. The disgraced businessman, who has been dubbed the “Lebanese Madoff” by local media, is said to have personal ties to senior leaders in the powerful Shiite movement (two of his businesses were named after Nasrallah’s late son, Hadi). Many investors—mainly Shiites from Beirut and villages in southern Lebanon—trusted their money to Ezzedine precisely because of his close ties to Hezbollah. They believed they were in good hands, and disregarded the fact that Ezzedine provided no research or paperwork to back up his promise of up to 40 per cent returns on investments in oil, metals and other commodities.

Prior to these revelations, Ezzedine, 49, was known as a charitable and religious man. After making millions in oil, he built a stadium and a mosque in his hometown near Toura. (As many as 250 of the 5,000 residents there trusted him with their savings.) Ezzedine’s scheme is a major PR embarrassment for Hezbollah, an organization that claims a reputation for honesty and integrity built in part because of its extensive social work in Lebanon. Nasrallah initially denied his party had any official dealings with Ezzedine. His more recent promise to set up a “crisis network” to calculate losses may suggest otherwise.

Looking for more?

Get the Best of Maclean's sent straight to your inbox. Sign up for news, commentary and analysis.