The recent arrest of businessman Nabil al-Boushi on charges of being involved in the seizure of millions of pounds from private individuals under the pretext that he would invest the funds has taken Cairo by storm.
The defendant was referred to the Criminal Court charged with receiving money and not returning it. According to reports, Boushi collected $203 million from 83 victims.
Shady ventures
The case is an old and recurrent one. In the 1980s, when interest rates in Egypt were at their lowest, gold prices high, and recession dominating the real estate and money markets, several private investment companies emerged. With promises of incredibly high dividends—no matter how unrealistic—they managed to persuade thousands of people to hand them their hard-earned savings to ‘invest’. Companies such as al-Rayyan, al-Sherif, al-Saad, and al-Hoda—all notorious swindlers who robbed Egyptians of millions upon millions of pounds—hid behind the ‘Islamic’ religious cloak and became household names.
The owners of the investment companies entangled officials and officers in their web, seducing them with lucrative remuneration packages in the form of consultancy fees. But such huge sums were in reality no more than bribes in return for loyalty, support, power and protection. Some companies even used the influence of famous Imams such as Sheikh Mitwalli al-Shaarawy to validate their activities. It did not take long for the companies to lose the investors’ money.
Islamic investment
September 1989 marked the beginning of the downfall of al-Rayyan, the most notorious of all the fraudulent companies, with the discovery that this family- owned business had squandered EGP3.280 billion of investors’ money in the stock market and through direct money transfers to the United States and foreign banks. It was also discovered that banking officials, as well as men of religion and the media, had helped move the money in exchange for being enrolled in what Rayyan termed koshouf al-baraka (Lists of blessings). The term itself was a play on the religious sensitivities of people, implying that since Rayyan [claimed he] was exclusively investing the money in Islamic economic practice, the profits that came in were ‘blessings from the Divine’. In reality the money paid according to the lists of blessings was no more than money paid under the table.
The great escape
Meanwhile the owner of the second largest fraudulent investment company, Ashraf al-Saad, is reported to have collected as much as LE1 billion. In 1991 he escaped to Paris on the pretext of a medical checkup three months before he was officially added to the lists of individuals not allowed to leave the country. Saad was sentenced to two years for issuing a bouncing cheque, and subsequently suddenly returned to Egypt where he was arrested and charged with squandering EGP188 million along with eight other charges. He was later granted bail based on condition of allowing a committee to check his financial documents but once again escaped to Paris, this time with no turning back.
The same scenario repeated itself with the ‘Iron woman’—Hoda Abdel-Moniem—who managed to garner EGP45 million from Egyptians who believed that she would invest their money in real estate. As with all the other cases, when her debts became insurmountable, she left the country.
Laila al-Farr played the same game in the late 1990s, but this time she targeted banks and managed to transfer more than EGP250 million out of the country. She was later tried for theft and embezzlement. Another woman tried the same scam on Sa’idi (Upper Egyptian) men and women and managed to steal more than EGP40 million with promises of huge interest rates. The list goes on and on; even today when people should have learnt not to fall for the same tricks the temptation obviously remains too great.
The government steps in
By the end of 2006, money embezzlement had become a national scandal and the government decided to step in, repay all the outstanding amounts of money—which amounted to almost EGP368 million—and close the case once and for all. The refunded money was drawn from the profits of the Central Bank of Egypt. Roughly 47,000 families benefited from this move.