Pyramid schemes in Albania

This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (July 2011)

This article may need to be rewritten entirely to comply with Wikipedia's quality standards. You can help. The discussion page may contain suggestions. (November 2011)

Part of the
1997 rebellion in Albania
Fighting groups
Forum for Democracy · Committee of Public Salvation · Government of National Salvation · Operation Alba · Volunteer Forces
Gangs of 1997
Gang of Çole · Gang of Gaxhai · Gang of Altin Dardha · Gang of Pusi i Mezinit · Gang of Cërrik · Gang of Lushnje · Gang of Tepelena · Gang of Haklaj Family
Massacres in 1997
Massacre of 28 February 1997 · Massacre of Qafë-Gjashta · Massacre of Levan · Massacre of Cërrik · Massacre of Ura Vajgurore
Tragedies of 1997
Otranto Tragedy · Qafë Shtama Tragedy
Treasury thefts
Krraba Stealing · Nortgern State Stealing
Rescue missions
Operation Silver Wake · Operation Libelle
Agreements
6 March 1997 · 9 March 1997
UN Resolutions
Resolution 1101 · Resolution 1114
Important events
Opening of the depots · Desertion of 4 March 1997 · Attack of 7-8 March 1997 on Gjirokastër · Visit of Romano Prodi · Albanian parliamentary election, 1997 · Albanian monarchy referendum, 1997
See also
Pyramid schemes in Albania · Role of media in 1997 · Literature on the events of 1997 · Conspiracy theories about 1997
v · d · e

Pyramid schemes in Albania were Ponzi schemes that precipitated the 1997 unrest in Albania. They started operations in 1991 with the first being formed by Hajdin Sejdia,^[1] former economic advisor of Prime Minister Fatos Nano. After starting works for the construction of an alleged hotel in central Tirana, he escaped to Switzerland with several million dollars. The area became known as Hajdin Sejdia's Hole. Later it was filled back by crews to create a local park, but since then quickly turned into an area used by the local prostitution scene. Following the events, some creditors were liquidated while others not. It is alleged that most of the sums are still held in foreign banks.

Background

In the mid-1990s, Albania was transitioning into a liberalized market economy after years under a State-controlled economy reinforced by the cult of personality involving longtime Communist leader Enver Hoxha; the rudimentary financial system became dominated by pyramid schemes, and government officials tacitly endorsed a series of pyramid investment funds. Many Albanians, approximately two-thirds of the population, invested in them. In 1997, Albanians, who had lost $1.2 billion, took their protest to the streets where uncontainable rioting and attacks on government infrastructure led to the toppling of the government and the temporary existence of a stateless society. Although technically a Ponzi scheme, the Albanian scams were commonly referred to as pyramid schemes both popularly and by the International Monetary Fund (IMF).^[2]

Pyramid schemes of 1997

The year 1997 came as a tragic consequence of the bankruptcy of some 25 firms were pyramid around $1.2 billion savings of Albanians.

Sudja

This firm was established in 1993 by Maksude Kadëna, a Gipsy who had worked in the shoe factory. This firm existed in the semi-underground until 1996, when two weeks before the election was recorded in the same court and judge, where he recorded "Xhaferri" and "Populli". The first game Sudes misleading, called "Victory" is accepted as personal initiative Xhaferri. Sudja had no bank account, so its bankruptcy also lost money inserted therein. Strange is that when he was arrested Sudja found eating bread with butter in a destroyed apartment. Its collapse triggered several protests in Tirana, where he was also its area of ​​operation.

Vefa

Vefa Holding was the main pyramid firm. It was created in 1994 by Vehbi Alimuça and lay down across the country. Vefa invested in various fields of economy such as hotels, fuel, stores and factories. Best known is the bomb assassination a few weeks before the elections of 26 May 1996 to Vefa's supermarket in downtown Tirana. Vefa often seen as the firm's rentier PD. It went bankrupt in 1998, while its president is in prison.

Gjallica

The Gjallica firm was created by three former State Security effective originating from Kukes. President of the company was Shemsie Kadria. Gjallica had its center in Vlora. The firm went bankrupt on February 5, 1997, prompting violent protests in Vlora, which later turned into rebellion against the government.

People's Democracy-Xhaferri

This firm was established in 1995 and began to extend its activities in the villages of Lushnja, Fier and Berat. Officially it was a "foundation" but in fact became one of the most severe pyramidal firms in the country. Its leader, Rrapush Xhaferri, was arrested on January 22, 1997, which triggered violent demonstrations in Lushnje January 24-25.

Populli

This Populli (English: People) firm was created on July 16, 1996 and was extended in the same area as the Xhaferri. Its President was Bashkim Driza the former State Security agent. He worked deeply with the Albanian opposition parties finance their campaigns and newsletters. During the riots of 1997, he left with a U.S. helicopter.

Full list of Albanian pyramid schemes

• Hajdin Sejdia
• Gjallica
• VEFA
• Populli
• Demokracia Popullore-Xhaferri
• Kamberi
• Cenaj
• Silva
• Malvasia
• Kambo
• Grunjasi
• Dypero
• Bashkimi
• Beno
• Pogoni
• B&G
• Kobuzi
• Arkond
• Adelin
• A.Delon
• Agi
• M.Leka Company
• Global Limited Co.
• Çashku
• Sudja

The nine major pyramid firms in relation with creditors

References

• “Rënia e Demokracisë”, Afrim Krasniqi, 1998, Eurorilindja
• “Unë e pashë kush e dogji Vlorën”, Gëzim Zilja, 2000, Pelioni
• International Monetary Fund, The Rise and Fall of Pyramid Schemes in Albania
• Impact of Pyramid Schemes on Albania
• Albanian Pyramid Schemes
• World Bank, Albania Under the Shadow of Pyramid Schemes

External links

• Sudja Song by local singer Myslym Lela