A staggering 103,000 Albanians have fallen victim to a covert and fraudulent pyramid scheme orchestrated by several unlicensed financial entities and debt collection agencies. These organizations are now facing legal action for allegedly defrauding citizens through microcredit schemes.
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| A 30-year-old man behind a laptop sitting in an office holding a black mask over his face with his right hand and a white mask in his left hand |
The Prosecutor's Office has uncovered a pyramid scheme that these unlicensed entities have been operating openly for years. Approximately 100,000 citizens were ensnared in this scheme, with 20,000 of them currently entangled in legal battles, left to the mercy of fate.
According to the Prosecutor's Office, these companies acquired 3,999 non-performing loans from a second-tier bank, amounting to €7,299,203. They utilized a coercive credit-taking scheme, which resulted in the freezing of around €510 million in citizen assets.
Notably, consumer credit was extended by non-banking financial institutions to individual applicants, often without any counseling or involvement of adult family members to assume legal responsibility for loan repayment.
The lenders assumed the risk of issuing these loans. However, questions arise about how the collateral could be executed through private bailiffs, affecting the entire family's immovable property for a financial obligation taken by one member, often without the knowledge of the others.
Over six years, this type of credit and its subsequent sales and resales have led to a paradoxical situation where interest amounts plus indirect costs have surpassed the principal value.
"Documents reveal that these companies acquired 3,999 non-performing loans from a second-tier bank, totaling €7,299,203, and used a coercive credit-taking scheme to impose on debtors with old bank debts, forcing them to take new loans despite their inability to repay. Their wages, properties, and cars were blocked by enforcement companies," stated the Prosecutor's Office. It also highlighted that certain second-tier banks, property registries, and government institutions failed to regulate enforcement offices or financial institutions issuing microcredits, effectively "turning a blind eye."
Despite the Ministry of Justice's filing of a complaint against entities like Micro Credit Albania, ADCA, SHP Zig, FS, FLASH, and their bailiffs four years ago, delays in investigating this scheme have deepened the victims' plight in the "hole of this pyramid scheme."
The opposition party, through its Secretary for the Program, Arbi Agalliu, provided concrete figures for this megascheme. According to him, the schemes have affected 103,000 citizens, with around 19,376 still being defrauded by financial institutions allegedly supported by the government.
“510 million euros have been paid by the most vulnerable members of Albanian society, pressured by public officials to fulfill obligations they never incurred. 570 million euros worth of assets have been blocked or transferred to these financial fraudsters due to illegal procedures by the property registries or lack of control over bailiffs who violated the law to support these modern pyramids conceived and backed by Edi Rama and his deputies," Agalliu stated.
Financial expert Eduart Gjokutaj, speaking on RTSH 24, noted that some judges have issued unfair rulings against citizens in microcredit cases. He emphasized that second-tier banks' non-performing loans should have been regulated by the Bank of Albania and legal financial institutions.
"Microcredits have been misunderstood. The problem also lies with the monitoring bodies. It is crucial to resolve the issue of people held hostage and reform the legal instruments involved. These institutions are licensed and supervised by the Bank of Albania. There should have been coordination among all institutions to keep them under scrutiny," Gjokutaj said.
According to him, these schemes have deviated from their original purpose and ceased to exist in many European countries.
“In Albania, problems persist, but not all institutions should be prejudged as some operate lawfully. Second-tier banks that sold debts must take a stance. The first step should be to halt operations and review the enforcement offices to identify law violators. This phenomenon should have been addressed in time to prevent the current situation. Citizens' financial ignorance has been exploited, leading to clear abuses," Gjokutaj added.
He warned that what has transpired is a blemish on the financial market, with law violations leading to significant abuses.
The Prosecutor's Office at the Court of First Instance of General Jurisdiction in Tirana has requested "Arrest in prison" and "House arrest" for nine individuals charged with "Fraudulent and pyramid scheme," following a criminal complaint by the Ministry of Justice against Micro Credit Albania, ADCA, SHP Zig, FS, FLASH, and their bailiffs.
The Fraudulent Scheme
The investigation revealed that the aforementioned companies acquired 3,999 non-performing loans from a second-tier bank, totaling €7,299,203. They used a coercive scheme to force debtors with old bank debts to take new loans despite their inability to repay, leading to the blocking of salaries, properties, and vehicles by enforcement companies.
To liquidate these loans, MCA allegedly used fraudulent tactics, forcing creditors to take new loans to unblock the old ones, with MCA still holding the portfolio. This scheme targeted various borrowers, who ended up losing significant assets, causing substantial economic damage.
Exploitation Through Late Fees
These financial institutions applied a 2% + 8% annual late fee, and according to the accounting expert's report, the total initial principal debt for all orders involving Micro Credit Albania was 575,842,669.60 ALL. The total legal late fee according to the 2% + 8% annual rate amounted to 258,687,709.07 ALL.
The investigation highlighted cases where conservative seizures were placed on the immovable properties of individuals with no connection to the judicial execution decisions. A typical case involved a debtor with a 347,958 ALL overdue obligation, where Micro Credit Albania seized 14 immovable properties.
The evidence gathered confirmed that bailiffs Arben Meskuti, Alban Kote, and Alketa Tanushi were guilty of "Abuse of office." Kejda Seferi, in her capacity as a bailiff, was suspected of "Theft," while Aldo Daka, Albert Gega, and Edmond Mato, administrators of the enforcement companies Star-FS, were suspected of "Theft." Elda Ibro, the administrator of MCA, was also suspected of "Theft."
Security Measures
Based on the collected evidence, the Prosecutor's Office at the Court of General Jurisdiction in Tirana decided on:
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| From the left above: Elda Ibro, Kejda Seferi, Jordisa Dervishi, Alketa Tanushi,Arben Meskuti, Alban Kote, Arbert Gega and Aldo Dako, source: local media |
- Arrest in prison" for Aldo Daka - administrator of Star-FS enforcement companies
- Arrest in prison" for Albert Gega - administrator of Star-FS enforcement companies
- Arrest in prison" for Edmond Mato - administrator of Star-FS enforcement companies
- House arrest" for Kejda Seferi - judicial bailiff
- House arrest" for Elda Ibro - administrator of Micro Credit Albania
- House arrest" for Jorsida Dervishi - judicial bailiff
- Arrest in prison" for Arben Meskuti - judicial bailiff
- Arrest in prison" for Alban Kote - judicial bailiff
- House arrest" for Alketa Tanushi - judicial bailiff
The Economic and Financial Crime Investigation Sector of the DVP Tirana, under the direction of the Prosecutor's Office at the Court of First Instance of General Jurisdiction in Tirana, executed the security measures for Aldo Daka, Albert Gega, Edmond Mato, and Arben Meskuti. Kejda Seferi, Elda Ibro, Alketa Tanushi, and Jorsida Dervishi were placed under house arrest. Efforts are ongoing to apprehend Alban Kote, a 43-year-old resident of Tirana.