[Nettime-bold] Life As an Albanian Ponzi Scheme Mogul

["Bruce Sterling" <bruces@well.com>]

It's a traditional nettime favorite: giant, nation-smashing
pyramid schemes -- bruces

from those invaluable folks at:

RADIO FREE EUROPE/RADIO LIBERTY, PRAGUE, CZECH REPUBLIC
_______________________________________________
RFE/RL BALKAN REPORT
Vol. 4, No. 42, 6 June 2000


ALBANIA'S PHARAOH AND HIS PYRAMIDS. One of Albania's most
famous criminals may soon find himself a free man. And that
is not likely to be the end of his saga by any means.

 A Tirana court sentenced the founder of the VEFA Pyramid
investment scheme, Vehbi Alimucaj, to five years in prison on
31 May, "Klan" reported on 4 June. The court found Alimucaj
guilty of stealing over $325 million from 68,857 citizens
through fraud. Judge Gjin Gjoni also ruled that Alimucaj was
involved in arms trafficking and illegally transferring money
outside Albania.

 Alimucaj, who was arrested in 1997 after the collapse of
his pyramid scheme, still has 23 months of his sentence to
serve. But he can stay under house arrest in his comfortable
villa outside Tirana. Observers also noted that he is likely
to be released before the end of his term. VEFA was the first
and largest of six pyramid schemes to collapse in Albania.
All of them paid unusually high interest rates to creditors
by using the capital supplied by new investors.

 Alimucaj started his business career in 1993 by selling
soap in a rundown building in the center of Tirana. The
communist-era army officer had registered himself as a
businessman in 1992 with capital of about $700 in the bank.
Already one year later, his VEFA company had six employees,
fixed capital of $542,000 and a annual profit of $639,000.
Alimucaj had managed to increase his turnover by attracting
large numbers of investors and paying monthly interest rates
between 6 and 12 percent.

 Alimucaj claimed he was investing the money in numerous
business activities--and thus was able to attract still more
customers, while in reality his productive businesses were
very limited. On 1 January 1997, the balance of accounts
showed that VEFA had debts of $458 million. At the same time,
the proper business activities of VEFA generated revenues of
only $ 2.12 million.

 Alimucaj relied on an extended network of friends, who
helped him transfer and launder money throughout the world.
While trying to convince his creditors that his business
activities were solid, he mentioned in the spring of 1997
that VEFA has "branches" in the U.S., Turkey, Russia,
Macedonia, Greece, Italy, Bulgaria, and Canada. But
investigators have only been able to discover parts of his
networks.

 When the creditors began to demand their money back at
the beginning of 1997, Alimucaj began to transfer the money
out of the country in earnest. In January and February, he
loaded helicopters belonging to VEFA with packages of money
and brought them to a factory in the port city of Vlora.
Prosecutor Ajaz Gjata said that the authorities have not yet
found much of that money.

 VEFA pilots recalled that during the unrest, which
started in Vlora in March, Alimucaj ordered them to fly an
Italian citizen to Bari. He was carrying a bag, possibly
containing money. Alimucaj claims that he does not recall the
name of that Italian. But the judges believe that the flights
were part of an effort to smuggle money out of Albania. They
also proved that Alimucaj opened several bank accounts under
the names of some of his employees in order to be able to
withdraw more money per day than allowed by law at the time.

 Between 19 February and 26 June, Alimucaj transferred
$2.28 million to the account of a company with the name of
Velad. The only business activity of that company ever
recorded was to receive that sum of money. Then the
registered owners of that company handed the money to Dionis
Bulukos, a Greek lawyer, who ran a bank account for Alimucaj
in Greece. At that time, Bulukos was negotiating a draft
contract between Alimucaj and another Greek businessman about
the possible sale of VEFA.

 Others involved in smuggling money out of Albania
included the Albanian Astrit Mece. In one incident, Austrian
police caught Italian citizen Nikola Rokira with $500,000 at
the Vienna airport and could verify that the numbers of the
dollar bills he was carrying were identical with those that
Mece had previously withdrawn from the Savings Bank in
Tirana. Rokira maintained, however, that he received the
money from a person whom he did not know in Skopje and that
he was told to hand it to a friend of his in the U.S.,
Vincenco Kartelino. Elsewhere, Swiss investigators discovered
that Alimucaj's son, Edmont, has a bank account at the Union
Bank of Switzerland, which contains about $1.1 million.

 Meanwhile, the Greek authorities have launched
investigations against Alimucaj's brother-in-law Dhimiter
Cico for "keeping, hiding, and accepting money of criminal
origin." Another man who received VEFA money was Alfredo de
Giuseppe, an Italian businessman, who put a total of $875,000
from Alimucaj into his own company--Gestione Investimenti--as
Alimucaj's share.

 Prosecutor Gjata maintains that Alimucaj cooperated with
organized criminals in many countries, especially in
Switzerland, including the dubious Kosovar Hajdin Sejdia.
Sejdia was the first man--before Alimucaj--to launch a
pyramid scheme following the end of communism in Albania.
Swiss-based Sejdia attracted investments from Kosovars for
his company Illiria Holding. He promised to build a large
hotel complex in the center of Tirana, but construction never
got beyond the stage of digging a huge hole in the ground. To
this date, it is a well-known eyesore just off central
Skanderbeg Square. Albania subsequently extradited Sejdia to
Switzerland, where he faced trial for fraud.

 Alimucaj's cooperation with Sejdia apparently began in
1992, when the two intended to cooperate in building the
hotel. In 1996 Alimucaj and Sejdia met in Budapest for the
last time, but the details of their cooperation remain
fragmentary.

 "Klan" asked rhetorically why Alimucaj did not get a
longer sentence and stressed: "After less than two years
Vehbi [Alimucaj] will be free again. If we believe the
testimony of the witnesses, he and his family will then be
able to live like real pharaohs, with the money that they
took out of Albania." (Fabian Schmidt)


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