Pyramid schemes in Albania
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|Part of the|
|Albanian Rebellion of 1997|
|Gangs of 1997|
|Massacres in 1997|
|Tragedies of 1997|
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, 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.
In the mid-1990s, Albania was transitioning into a liberalized market economy after years of a State-controlled economy; 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).
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.
This firm was established in 1993 by Maksude Kadëna, also known as Sudja, a Gipsy who had worked in a 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 she 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. Strangely, when Sudja was arrested she was living in a dilapidated apartment complex. The collapse triggered several protests in Tirana, where was also its area of operation.
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 was in prison.
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.
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.
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
- Demokracia Popullore-Xhaferri
- M.Leka Company
- Global Limited Co.
The nine major pyramid firms in relation with creditors
|Company||No. of Creditors|
- Christopher Jarvis, The Rise and Fall of Albania's Pyramid Schemes, Finance & Development: A Quarterly Magazine of the IMF, March 2000.
- Glauber, Bill (23 February 1997). "It's bad in Albania and it's about to get worse Failed pyramid deals spread fear, unrest". Baltimore Sun. Retrieved 27 August 2012.
- “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