Bangladesh businessman, wife receive life sentences in nation’s largest-ever bank scam

By Faisal Mahmud

DHAKA, Bangladesh (AA) - A Bangladesh businessman and his wife received life sentences Tuesday in the nation’s largest-ever bank scam case.

Tanvir Mahmud, the managing director of Bangladesh’s Hallmark Group, and his wife Jesmin Islam, were sentenced by a court in Dhaka in one of the cases filed concerning the $350 million Sonali Bank loan scam.

Nine others, including Humayun Kabir, then CEO of the largest state-owned Sonali Bank, received prison time in the case.

The scam, widely known as the Hallmark scandal, sent shockwaves through Bangladesh's banking industry and exposed major scams where billions of dollars were funneled out of the country through bad loans and invoicing.

Judge Abul Kashem of Dhaka’s Special Judge’s court said the highest penalty for such a large-scale embezzlement should have been a “death sentence.”

Bangladesh Bank, the country's central bank, uncovered a major loan fraud in May 2012 at Sonali Bank's Ruposhi Bangla Hotel branch.

It involved more than $350 million, with the Hallmark Group as the primary beneficiary. The Group obtained more than $260 million through forged documents, working alongside certain bank officials.

Following the discovery of the loan scam, Bangladesh's Anti-Corruption Commission filed a case Oct. 4, 2012. The investigation concluded Oct. 7, 2013, resulting in charges against 26 individuals, including Islam, who was Hallmark Group's chairman, and Mahmud.

Eleven cases were brought to court in connection with the scam.

In the wake of the scandal, Bangladesh's renowned think-tank, the Centre for Policy Dialogue (CPD), has undertaken extensive research on loan scams plaguing the banking sector.

Their latest report, State of the Bangladesh Economy in FY 2023-24, reveals a staggering amount exceeding $8 billion embezzled through 24 loan scams since fiscal year 2008-09. It highlights a serious issue that has cast a wide shadow on the nation’s financial health for more than a decade.

“Hallmark scam was a wake-up call for Bangladesh’s banking industry,” Khondokar Golam Moazzem, the research director of CPD told Anadolu.

“But, unfortunately, the government still hasn’t taken much steps to prevent bank scams,” he said.