Albanian 'financiers' fail to play the game

Andrew Gumbel Lushnje
Thursday 06 February 1997 00:02 GMT

It probably wasn't a very smart career move for an ambitious 19- year-old centre forward from Nigeria to sign up with a second-rate Albanian league side. But Leonardo Nosa Ineh also had the misfortune to join a club whose president, Rrapush Xhaferri, ran one of the country's infamous pyramid investment schemes.

On paper the conditions seemed too good to be true: a $40,000 (pounds 24,000) contract for two years and the chance to be coached by Mario Kempes, veteran of the legendary Argentinian side that won the World Cup in 1978. But Xhaferri is now in jail, his assets frozen by the government, and Nosa is stuck in the provincial town of Lushnje without a penny, thoroughly confused, and unable to make so much as a telephone call.

He has to depend on the charity of the equally impoverished townsfolk to bring him food, and holds on to the hope that the middleman, a Greek- Albanian, who coaxed him to Lushnje in the first place, will show up and take care of him.

"I came here because I wanted to play first division because that's the only way to get noticed," he explained in an interview in his ramshackle one-room flat. He still hopes, a touch optimistically, to be able to steer Lushnje to the Albanian League Cup and get into European competition next season; either he doesn't know the jig is up, or he just doesn't want to know.

Nosa is the big loser of one of the more surreal tales to emerge from Albania's ill-fated pyramid scheme craze. Quite how he lost all his money is a mystery (he insists he steered well clear of the pyramid schemes himself). Two Brazilians who signed up with him were smart enough to slip out of the country as soon as trouble beckoned, while Mr Kempes is "on holiday" back home having pocketed a $175,000advance.

The chaos left in Xhaferri's wake cannot be overstated. Half of Lushnje, the entrepreneur's home town, is currently living with the other half because their own houses have been sold and the proceeds lost. The two policemen who arrested Mr Xhaferri two weeks ago had themselves lost all their money to him; as they waited for their detainee to gather his things at his house in Tirana they symbolically shared a last cigarette knowing it would be a long time before they could afford to smoke again.

Wild tales abound all over the country. One story - absolutely true - concerns a young man who wanted to get married but didn't have the money to do it. He raised $1,700 from his friends, then went to Bashkim Driza, head of the Populli pyramid scheme, to arrange an "investment". Mr Driza, being a personal friend, gave him $2,600 out of his own pocket as an instant payback and sent him on his way. But, as the young man left the Populli office, he saw the huge crowd of investors outside, yielded to temptation and put all his money back into the scheme. Now he is broke, can't get married, and still owes his friends $1,700.

It is almost impossible to find an Albanian who has not put money into the schemes, and only slightly less hard to find one who has actually profited from them.

The effect of all this money disappearing has been less than salutary. Quite apart from the recurring riots, sparked by frustration and anger, there is a sense that Albanians have suddenly become more grasping.

One young couple who lost $50,000 said their furniture import business had ground to a halt because customs policemen - no doubt themselves losers to the schemes - were demanding huge bribes to allow the wares into the country and often "confiscated" the goods for themselves.

Clearly the pyramid schemes have brought out a gambling streak in many Albanians who even now are spending their afternoons and evenings catching on to the country's latest fad - video bingo.

And the schemes may even have refined the country's taste for scams and financial skullduggery.

Five years ago, a businessman from Kosovo, Hajdin Sejdia, raised millions of dollars from ordinary Albanians to build a luxury hotel, then absconded with the money and left an enormous hole in the ground in the centre of Tirana.

Then, last October, Mr Sejdia unexpectedly announced that he was coming back and would reimburse everyone, with interest. Why he should have done this is a mystery, although it is almost certainly linked to the pyramid schemes. Investors duly went to the designated bank to recoup their losses, but although they were obliged to sign a piece of paper declaring that they received 20 per cent interest they received only their original capital.

An acquaintance of mine who had invested in the scheme both for himself and for a Italian friend took out his own and his friend's money, but wired on only $2,000 of the Italian's original $8,000 dollar investment. "I told him that's all I was given, and pocketed the difference," he said with a smirk.

n Vlore (Reuters) - Thousands of Albanian investors duped by pyramid investment schemes staged fresh protests in the southern port city of Vlore yesterday after the collapse on Tuesday of the Gjallica scheme.

The demonstrators, many of whom had sunk their life savings into the schemes, demanded their money back and the resignation of the right-wing government, led by President Sali Berisha. Police used water cannon and fired into the air to break up about 3,000 marchers.

Join our commenting forum

Join thought-provoking conversations, follow other Independent readers and see their replies


Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in