Iranian Billionaire Executed for Bank Fraud
There is a saying to the effect that if you live long enough, you’ll see everything. Well, this is one of those times.
Anarchist and atheist that I am, I am about to write a piece in tepid support of the Iranian regime and the justice system in that country. And no, I haven’t been in the cooking sherry. This is much more intoxicating — they hanged a crooked billionaire.
I know, crooked billionaire is a redundant term. As Balzac said, behind every great fortune there is a great crime. But for once, the rich bugger paid for it.
Mahafarid Amir Khosravi, also known as Amir Mansour Aria, along with 38 others faced charges of bank fraud. Four including Khosravi got death and were hanged at Evin Prison north of Tehran on Saturday. Two others got life in prison, and the rest faced as much as 25 years in jail.
The Associated Press explained, “The fraud involved using forged documents to get credit at one of Iran’s top financial institutions, Bank Saderat, to purchase assets including state-owned companies like major steel producer Khuzestan Steel Co. Khosravi’s business empire included more than 35 companies from mineral water production to a football club and meat imports from Brazil. According to Iranian media reports, the bank fraud began in 2007.”
Now, there is some internal politics going on here that may well have influenced the decision of the court. Corruption in Iran is a big problem, and questions have popped up about the amount of corruption under former President Mahmoud Ahmadinejad. One interpretation of this execution is that the new president is putting the nation on notice that corruption won’t be tolerated. Another is that maybe now that a big shot has been punished, everyone can get back to the business of collecting bribes.
What no one is denying is that the fraud occurred. The AP also said, “Mahmoud Reza Khavari, a former head of Bank Melli, another major Iranian bank, escaped to Canada in 2011 after he resigned over the case. He faces charges over the case in Iran and remains on the Islamic Republic’s wanted list. Khavari previously admitted that his bank partially was involved in the fraud, but has maintained his innocence.” Yes, there was fraud. No, it wasn’t me.
Was the penalty extreme? Yes, I think so. On the other hand, I don’t happen to believe (as the ayatollahs claim they do) that the dead go to paradise. If I am wrong, maybe they did the guy a favor by hanging him.
Compare that fraud to the banking fraud in the U.S. that almost brought down the global financial system. Forging bank documents? There were banks forging their own documents, “robo-signing” as it was known. And not just enough documents for a loan or two, but enough to destabilize the real estate sector. Hundreds, even thousands, of people were involved in it. And it was corporate policy — as such, it violated the Racketeer Influenced and Corrupt Organizations (RICO) Act.
And how many people have gone to jail for it? The rough, ballpark estimate is “none.” A former Goldman Sachs trader named Fabrice Tourre was found guilty of fraud in a collateralized debt obligation transaction and ordered to pay $825,000 in fines and restitution. However, that was less than the $910,000 the Securities and Exchange Commission requested back in December. When this penalty was handed down, Tourre said, “I remain deeply grateful for the unwavering support of my family and friends as I consider potential next steps in the legal process. I am focused on earning my doctorate in macroeconomics and pursuing an academic career.” Think ill all you like of macroeconomics — it isn’t death row.
When the Savings and Loan disaster broke in the 1980s, more than 800 bankers went to jail under the pro-business Justice Department of Ronald Reagan. Surely there is some kind of middle ground here. I don’t think execution for bank fraud is quite right, but no trial, let alone no punishment, isn’t right either.