Firm Assisting In Zeek Receivership Probe Has Another High-Profile Case; New York Times Reports That Kroll Investigative Firm Discovered ‘Well-Concealed Ponzi Scheme’ At Kabul Bank And ‘114 Rubber Stamps For Fake Companies’

A company retained by the court-appointed receiver in the Zeek Rewards Ponzi scheme case received a prominent mention in the New York Times yesterday.

The company, the Kroll investigative firm, uncovered a massive Ponzi fraud at Kabul Bank in Afghanistan in which hundreds of millions of dollars were siphoned from depositors to benefit a “narrow clique” of people tied to the Afghan government, according to an audit report obtained the Times.

Loan books were “almost entirely fraudulent,” the Times reported, citing the Kroll forensic audit.

“At one point, Kroll’s investigators found 114 rubber stamps for fake companies used to give forged documents a more legitimate look,” the Times reported, citing the audit.

From the Times (italics/bolding added):

What Kroll’s audit found is that on Aug. 31, 2010, the day the Bank of Afghanistan seized Kabul Bank, more than 92 percent of the lender’s loan portfolio — $861 million, or roughly 5 percent of Afghanistan’s annual economic output at the time — had gone to 19 related people and companies, according to the audit.

Kroll is one of the firms retained by Zeek receiver Kenneth D. Bell. Its name is referenced in the Preliminary Liquidation Plan Bell filed Oct. 8.

In the filing, Bell informed Senior U.S. District Judge Graham C. Mullen of the Western District of North Carolina that Zeek had “at least one foreign account” that had not been seized in the aftermath of the SEC’s Ponzi scheme investigation.

It was “not clear” whether the funds would be recoverable despite the fact the bank that holds the account has been served with a freeze order, Bell advised Mullen in the filing.

Bell did not name the bank or its home country in the filings. Nor did he say how he discovered the account.

On Aug. 17, the SEC described Zeek as a $600 million Ponzi- and pyramid fraud operating from Lexington, N.C.

Some Zeek members have worked virtually nonstop since that time to demonize Bell, a former federal prosecutor who once successfully prosecuted a Hezbollah terrorist cell operating in the United States.

Zeek had “internet customers and contacts throughout the United States and internationally,” Bell advised Mullen.

Kroll Ontrack has assisted the receivership “with the collection of electronically stored information obtained from” Zeek, Bell advised Mullen.

In the case in Afghanistan, Kroll prepared the audit for the country’s central bank, according to the Times. Twenty-two people have been charged in the Afghanistan case.

 

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5 Responses to “Firm Assisting In Zeek Receivership Probe Has Another High-Profile Case; New York Times Reports That Kroll Investigative Firm Discovered ‘Well-Concealed Ponzi Scheme’ At Kabul Bank And ‘114 Rubber Stamps For Fake Companies’”

  1. Quick note: In response to the story above, someone submitted a would-be “comment” consisting of dozens of instances of “F*** YOU?”

    Those were the only two words to appear in the “comment,” which was submitted at 10:14 a.m. ET.

    Patrick

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  2. Some persons have a very limited vocabulary.

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  3. Just imagine what they sent the New York Times.

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  4. Kroll is also mentioned in this article:
    http://www.hrmagazine.co.uk/hro/news/1075434/uk-whistleblowers-responsible-overseas-tip-offs-us-kroll
    Interesting bit:

    SEC made its first payment to a whistleblower under the Dodd-Frank Act in August this year, releasing around $50,000 to an individual who helped an investigation that resulted in more than $1 million in sanctions.

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  5. Tony H: Kroll is also mentioned in this article:
    http://www.hrmagazine.co.uk/hro/news/1075434/uk-whistleblowers-responsible-overseas-tip-offs-us-kroll
    Interesting bit:

    Hi Tony,

    Interesting story. Thanks for the link.

    The word about the SEC Whisteblower program does seem to be getting out.

    During the summer, I found at that at least one person had inquired about the program in the context of Zeek:

    http://patrickpretty.com/2012/06/20/bulletin-north-carolina-attorney-generals-office-refutes-suggestion-that-zeek-has-been-deemed-legal-we-do-have-concerns-agency-says-tv-station-removes-video-zeek-was-linking-to-on-its-bl/

    Patrick

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