Skip to main content
CNN

Ex-Kabul Bank chiefs slapped with prison sentences, huge fines

From Qadir Sediqi, CNN
updated 6:20 AM EST, Tue March 5, 2013
Former Kabul Bank CEO Khalilullah attends at a court in Kabul on March 5, 2013.
Former Kabul Bank CEO Khalilullah attends at a court in Kabul on March 5, 2013.
STORY HIGHLIGHTS
  • Two former Kabul Bank officials are sentenced to five years in prison
  • They must pay $278 million and $530 million to a recovery fund for victims
  • 19 others face sentences of between six months and four years
  • The bank was intended to help alleviate concerns about corruption

Kabul, Afghanistan (CNN) -- Two former Kabul Bank executives accused in a scheme that siphoned hundreds of millions of dollars now face years in prison and massive fines.

Investigators say the scheme cheated ordinary people's savings out of Kabul Bank in a case of "fraudulent lending and embezzlement."

Former Chief Executive Officer Khalilullah Ferozi was sentenced to five years and ordered to pay $530 million to a recovery fund to help the fraud victims, prosecutor Nasrrullah Hemad said Tuesday.

Former Kabul Bank Chairman Sherkhan Farnood was also sentenced to five years and must pay $278 million to the fund.

Who is calling the shots in Afghanistan?

The scandal that engulfed Kabul Bank has severely damaged the reputation of the Western approach to banking that it embodied in Afghanistan, one of the least developed countries in the world.

The bank was meant to provide a transparent way for Afghan government employees -- soldiers, teachers and police officers -- to receive and retain their salaries without the age-old fear of corrupt superiors confiscating the money.

Nineteen others face sentences of between six months and four years, Hemad said Tuesday.

The sentences can be appealed.

CNN's Jethro Mullen and Nick Paton Walsh contributed to this report.

ADVERTISEMENT
Part of complete coverage on
Afghanistan
updated 9:35 PM EDT, Mon April 1, 2013
CNN's Anna Coren reports on how U.S. Special Forces are not just fighting terrorists in Afghanistan.
updated 5:24 AM EDT, Fri May 24, 2013
With U.S. Special Forces in Afghanistan, CNN's Anna Coren reports on a Taliban firefight lasting more than 90 minutes.
updated 10:54 AM EDT, Mon April 1, 2013
Mallika Kapur has the story of a young Afghan graffiti artist who, despite Taliban threats, pushes for free expression.
updated
For the first time, a Pakistan government served its full term and the lack of a military coup attempt shows government is more stable than many think.
updated 11:22 AM EST, Sat February 16, 2013
President Obama has revealed new details about the troop withdrawal. But there are several key issues that still must be resolved.
updated 7:35 AM EST, Mon February 11, 2013
Author William Dalrymple's new book "Return of a King" looks at the history of foreign-led wars in Afghanistan.
CNN.com's 'Home and Away' initiative honors the lives of U.S. and coalition troops who have died in Iraq and Afghanistan.
updated 10:28 AM EST, Tue February 12, 2013
Former Army Staff Sgt. Clint Romesha receives the Medal of Honor for his role in one of the worst ground attacks of the Afghanistan war.
updated 4:18 PM EST, Tue February 12, 2013
osamabinladen
On Monday Esquire magazine published a massive profile of the Navy SEAL who says he shot Osama bin Laden.
The mother of a little Afghan girl cannot face her daughter. She looks down in shame as she explains why she must hand her over to drug lords.
updated 5:21 PM EST, Sun January 27, 2013
Aman Mojadidi, an American of Afghan descent, is an artist who has worked in Kabul and chosen particularly provocative themes.
updated 11:14 AM EST, Thu January 10, 2013
Afghan President Hamid Karzai met with President Barack Obama to discuss the post-2014 American presence in Afghanistan.
U.S. underestimates importance of Islam in making Afghanistan a better place, say authors.
updated 9:28 PM EST, Thu November 29, 2012
The number of people forced to flee their homes is increasing and the conditions for the displaced are far below international standards.
updated 3:24 PM EDT, Fri June 8, 2012
Unexploded munitions from war games in Afghanistan make a dangerous play ground for local children.
Her story of torture by the Taliban made her the iconic face of the oppression of women in Afghanistan.
ADVERTISEMENT