Banker-bashing Iran style: four fraudsters sentenced to death

Jul 31, 2012

Iran deals harshly with perpetrators of £1.7bn fraud after public outcry against cronyism

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IRAN has sentenced four people to death by hanging for their part in the country's biggest ever bank fraud, prompting comparisons with the lenient treatment of disgraced bankers in  the West.

Thirty-five other Iranian defendants have been sentenced to life imprisonment or terms of up to 25 years - and some face additional punishments such as flogging and fines.

The alleged mastermind of the £1.7bn fraud, billionaire Amir Mansoor Khosravi, is said to have forged letters of credit from Saderat Bank to fund dozens of companies and purchase a government steel factory during a privatisation drive, The Guardian reports.

It is not clear what punishment Khosravi is to receive. And the names of all the other defendants have been withheld. 

The verdict is a blow to President Mahmoud Ahmadinejad, according to the Financial Times, since some of the accused are allegedly linked to him through his close aide Esfandiar Rahim Mashaie. The president is engaged in a long-running power struggle with conservative elements in the Iranian regime who support the supreme leader, Ayatollah Ali Khamenei.

Among the Iranian public, outraged at the apparent croneyism and fraud, there are suspicions that not everybody involved in the fraud is being punished.

One of the defendants complained that low-ranked fraudsters were being used as scapegoats while senior officials had escaped justice: "Many other banking officials are outside of prison right now," he said. "Why are you able to put us on trial and have nothing to do with them?"

The fraud and the punishments meted out have prompted comparisons with events in the West.

Investment blog Zero Hedge tweeted: "In Iran 4 people were sentenced to death for the biggest financial scam in the nation's history. In America... Nobody"

Former Labour Europe minister Denis MacShane tweeted: "39 bankers on trial in Iran over $2.6 bn fraud. 4 death sentences, 2 life, rest 25 years. Is this taking banker bashing a bit far?"

Recently, Nobel prize-winning economist Joe Stiglitz called for dishonest bankers to be jailed. And Nouriel Roubini - the man who predicted the subprime crisis - said bankers will not change unless they are punished: "Nobody has gone to jail since the financial crisis. The banks, they do things that are illegal and at best they slap on them a fine.

"If some people end up in jail, maybe that will teach a lesson to somebody. Or somebody hanging in the streets."

Last week Tony Blair attempted to calm public anger by saying we wouldn't be better off "if we hang 20 bankers at the end of the street". This wouldn't be the first time Iran ignored the former British PM.

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Tony Blair attempted to calm public anger by saying we wouldn't be better off "if we hang 20 bankers at the end of the street". Perhaps Tony should volunteer to be the 21st ????