Turks to steer clear of pyramid schemes as a scandal raged at a top bank that allegedly defrauded celebrities and football stars of millions of dollars.
Turkey’s media has been filled with headlines for days about the troubles at privately-owned Denizbank.
Court documents reported by Turkish media show that one of the bank’s Istanbul branch managers orchestrated a $44-million scheme that promised 250-percent returns for those willing to hand over piles of cash.
The failed fund bore the name of Turkey’s legendary football coach Fatih Terim and allegedly defrauded stars such as former Barcelona midfielders Arda Turan.
Terim gained hero status by leading Istanbul’s Galatasaray to the UEFA Cup title in 2000.
He has not said anything in public about the scandal.
The Istanbul branch bank manager who created the fund, and reportedly received bags full of dollars from celebrities and players, said that Denizbank managers knew about the scheme.
Denizbank has denied the claim and said it has launched an internal audit to investigate the fund’s collapse.Erdogan said Saturday that “investigations into the suspects mentioned in this case continue”.
“Turkey is a state of law and whoever commits unlawful acts will be punished,” Erdogan said in comments released by his office.
“Our citizens should not fall into the traps of fraudsters who offer high profits in a short time with the promise of easy money,” he said.
Istanbul prosecutors are seeking more than 200 years in prison for Denizbank branch manager Secil Erzan for allegedly organising the scam.
Erzan reportedly launched the fund last year to help drum up cash to cover up past investment losses.Denizbank said in a statement that it “first became aware of the issue when a complainant, who is also our customer, came to the branch” in April.
The bank added that “the amounts in question are not significant in terms of the size for the bank’s” total assets. Denizbank now operates as a local unit of the Emirates NBD.
The Dubai-based lender purchased it from Russia’s state-owned Sberbank in 2019.
Turkish lender Denizbank said on Tuesday it had no role in the alleged swindling of Arda Turan, Fernando Muslera and other soccer stars by a former branch manager through a pyramid scheme.
An Istanbul prosecutor has sought a 216-year jail term for Secil Erzan, the former branch manager, on charges of defrauding a group of celebrities including Turan, the former Barcelona midfielder, and Galatasaray goalkeeper Muslera.
According to the October indictment, Erzan allegedly defrauded some $44 million from 18 individuals by promising substantial returns on their investments in a "secret special fund".
Erzan convinced the soccer stars to invest in the fund, in part by telling them that iconic former player and Turkish national team coach Fatih Terim had also invested, the indictment, seen by Reuters, alleges.
She partly paid some of the returns to some of the investors, but she failed to pay any returns or principal money to most of the investors, according to the indictment.
Erzan pleaded guilty, but said in mitigation that she paid back the principal money of almost all investors. She was not able to pay some of the returns she promised, she said.
In a statement released on Tuesday, Denizbank said that the lender had no information on the fund since all transactions took place outside the banking system.
Denizbank learned of the transactions on April 7 when some of the alleged victims informed it of Erzan's fund, and the lender handed over its internal investigation file to the prosecutor's office on April 10, the statement said.
"There is no record of that pyramid scheme at DenizBank," it said.
Erzan, who has been in custody since April 11, and six other individuals are accused of "aggravated fraud" and "document forgery."
Reporting by Ebru Tuncay and Huseyin Hayatsever; Editing by Jonathan Spicer and Alex Richardson