The country's judiciary carried out an extensive investigation of Iran's biggest bank fraud case. The businessman alleged to have led the fraud, Mahafarid Amir-Khosravi, was charged with forging letters of credit from Iran's Bank Saderat. The loans funded dozens of companies and purchase of a steel plant. Some claimed those close to the powerful abused their positions to procure the money. In addition, bank managers were said to have accepted bribes to get letters of credit and loans.
Officials announced on Feb. 18 that the death penalty had been handed down to four people—Amir-Khosravi, his legal advisor Behdad Behzadi, his financial solicitor Iraj Shoja, and Saeed Kiani Rezazadeh, in charge of a branch of Saderat Bank—for embezzling $2.6 billion in bank loans. Two others were sentenced to life, and others received jail sentences of up to 25 years in a case that shocked Iranians.
Others implicated in the case were sentenced to flogging, ordered to pay fines and banned from government jobs. Former head of Iran's biggest bank, Bank Melli, Mahmoud Reza Khavari, resigned over the scandal and fled to Canada.
Even among contending politicians, calls for swift action united all sides.
Iran's reaction to greed and corruption is in marked contrast to U.S. inaction for even bigger crimes. Bank executives who had overseen predatory lending and other fraudulent practices have stayed in power and out of prison even after the financial institutions they headed teetered on the brink of collapse, only to be saved by government bailouts at taxpayer expense.
The bailouts included partial nationalization of the banks. But instead of following through and seizing these "too-big-to-fail" financial giants and turning them over to committees of workers and community representatives to be run in the public interest—a popular demand raised by the Party for Socialism and Liberation—the government has allowed business to continue as usual and the bank executives to keep collecting obscene bonuses.
The result is all too predictable—another financial disaster is only a matter of time.