Lebanon's Madoff' Embarrasses Hezbollah

Those who know wealthy Lebanese Shi'ite financier Salah Ezz el-Din say he is a deeply pious, humble man whose close links to Hezbollah made his credentials impeccable as he allegedly embezzled their savings.

Many Shi'ite Lebanese investors find it hard to believe the philanthropist could have defrauded them to the tune of at least $500 million -- small change compared with the $65 billion in the U.S. fraudster Bernard Madoff's Ponzi scheme, but made more painful by the connection with Hezbollah, which its followers regard as incorruptible.

"Whoever says he's a thief, that is an incorrect assessment," said Fouad Ajami, a 36-year-old steel factory owner from the southern Lebanese village of Toura of the embezzlement charges made earlier this month against Ezz el-Din, who is now in Roumieh prison and due for more questioning on Sept. 24.

"He was a do-gooder, he may have been subjected to a financial setback," said Ajami. "And because he didn't want to show that, maybe he created ghost investments to cover his losses."

Some Hezbollah officials have also lost money with the financier, from whom Ajami said he had at first received returns of 30 percent annually.

Ezz el-Din was also said to pay for fellow villagers' medical bills, compounding the Hezbollah connection for many people.

Hezbollah also provides a network of social welfare services from education grants to subsidised medical treatment.

"To tell you the truth, people put their money with him because he was wearing the Hezbollah cloak," Ajami said.

Iranian-backed Hezbollah has a reputation for squeaky-clean honesty among its followers and famously compensated Shi'ite residents in southern Lebanon with $100-bill stuffed suitcases after the 2006 Israel-Hezbollah war.

Exactly what freaking universe do these peoples minds operate in.

That connection has been a political embarrassment, forcing Hezbollah leader Sayyed Hassan Nasrallah to address the issue. .....
"Hezbollah is one of those affected by the crisis, but it won't leave the people to their destinies. Actually, it creates an environment that will protect them security-wise, politically ... and even economically," Nasrallah was quoted by local media as saying.
This may be a reason why for now at least, many duped investors have refrained from filing lawsuits against Ezz el-Din and his partner Yousef Fa'our. ..... Hezbollah officials privately say they suspect him of fraud.
Part of Ezz el-Din's appeal was that he promised large returns on investments which he said were from oil and gas, iron and steel projects outside Lebanon.
And flush with cash in the post-war reconstruction boom, many investors found the get-rich-quick scheme attractive. Ajami said he first invested $90,000 after the 2006 Hezbollah-Israel war.
"Every two months, I received a check worth $4,950," he said. "Then his agent told us about investing in an Iranian gold mine which would guarantee profits of 20-25 percent within 100 days. On Aug. 22, I gave him $50,000 and my friend gave him $200,000." Shortly after, Ezz el-Din was arrested. .....
Ezz el-Din's hilltop mansion, lined with trees and bougainvilleas, overlooks the lush green fields of Ma'aroub. ..... The village, like many in the south, is virtually empty, save for multi-million dollar villas whose occupants generally live abroad and only visit Lebanon in the summer. .....
Political sources say the Lebanese central bank warned some investors a few months ago about Ezz el-Din. But it seems many refused to heed its warning. .....
Haj Kamal Shour, who with his three sons lost $1.03 million, said he never thought about investigating the investments, some of which they were led to believe were in Africa or Brazil, because of Ezz el-Din's "honesty and integrity". He believes a bigger conspiracy is behind Ezz el-Din's demise: the "Israeli Mossad and Zionist Lobby". .....

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