Pyramid Schemes In Albania
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The
1997 rebellion in Albania In 1997, Albania experienced widespread civil unrest due to economic problems caused by the collapse of pyramid schemes. The large sums of money siphoned from the government to fund these schemes led to the collapse of the Democratic Party's ...
was in large part triggered by the failure of multiple pyramid schemes. These schemes, which grew to an unprecedented scale relative to the country's economy, led to many Albanians losing their money and property, culminating in widespread protests across Albania that eventually escalated into a nation-wide rebellion. At their peak, it was estimated that one in six Albanians had invested in such schemes.


Firms bankrupted

The unrest in 1997 arose from the
bankruptcy Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the deb ...
of around 25 firms. The
face value The face value, sometimes called nominal value, is the value of a coin, bond, stamp or paper money as printed on the coin, stamp or bill itself by the issuing authority. The face value of coins, stamps, or bill is usually its legal value. Ho ...
of the schemes' liabilities totaled $1.2 billion, nearly half of Albania's
GDP Gross domestic product (GDP) is a monetary measure of the total market value of all the final goods and services produced and rendered in a specific time period by a country or countries. GDP is often used to measure the economic performance o ...
at the time. The schemes drew in almost two thirds of the country's population with the promise of sure financial returns, revealing the profound financial illiteracy and the lax regulatory environment in post-communist Albania. One such scheme, ''Sudja'', was set up by a Romany woman named Maksude Kademi. The firm collapsed on 15 January 1997, leading around 3,000 people to protest outside Kademi's apartment building. Kademi told the protesters that "the scheme has failed" and that "my company is bankrupt and you shouldn't ask the government for the money." Kademi was arrested later that day. ''Vefa Holding'' was the main pyramid firm. It was created in 1994 by Vehbi Alimuça and spread across the country. ''Vefa'' invested in various fields of the economy such as hotels, fuel, stores and factories. Best known is the bomb attack a few weeks before the elections of 26 May 1996 on Vefa's supermarket in downtown Tirana. ''Vefa'' went bankrupt in 1998, while its president was in prison. The ''Gjallica'' firm was created by three former State Security operatives originating from Kukes. The 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'' was established in 1995 and began to extend its activities in the villages of
Lushnjë Lushnjë (; locally ''Lushnje'' ; sq-definite, Lushnja) is a city and municipality in west-central Albania. The municipality's population is 63,135 as of the 2023 census, in a total area of . History In January 1920, Lushnje was a provis ...
,
Fier Fier (; sq-definite, Fieri, Latin: ''Fierum'') is the seventh most populous city of the Republic of Albania and seat of Fier County and Fier Municipality. It is situated on the bank of Gjanica River in the Myzeqe Plain between the Seman in ...
and
Berat Berat (; sq-definite, Berati) is the List of cities and towns in Albania, ninth most populous city of Albania and the seat of Berat County and Berat Municipality. By air, it is north of Gjirokastër, west of Korçë, south of Tirana, and ea ...
. Officially, it was a "foundation", but in reality, it 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 Lushnjë on January 24–25. ''Populli'', in English meaning ''people'', was created on July 16, 1996, and was extended in the same area as the Xhaferri. Its President was Bashkim Driza, a former State Security agent. He worked closely with the Albanian opposition parties and financed their campaigns and newsletters. During the riots of 1997, he left with a U.S. helicopter. In September 2008, on a notice from Albania, the Uruguayan police arrested Bashkim Driza at his apartment in
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. It was discovered that during the last 11 years, he had moved freely between
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,
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, the
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and other Latin American countries. Just as Driza was about to be extradited to Albania in February 2009, he escaped from his apartment. The nine major pyramid firms in relation to creditors were:


References


External links


Mega Holdings Albania

Sudja Song by local singer Myslym Lela


* ttp://www.crimes-of-persuasion.com/Crimes/InPerson/MajorPerson/albania_ponzi.htm Impact of Pyramid Schemes on Albania
Albanian Pyramid Schemes



''The Great Pyramids of Albania'', BBC radio documentary by Gavin Haynes.


{{Scams and confidence tricks 1997 Albanian civil unrest 1997 in Albania
Albania Albania ( ; or ), officially the Republic of Albania (), is a country in Southeast Europe. It is located in the Balkans, on the Adriatic Sea, Adriatic and Ionian Seas within the Mediterranean Sea, and shares land borders with Montenegro to ...