'Shi'ite Bernard Madoff' held in custody in Lebanon

Lebanese authorities are holding in custody a prominent Shi'ite financier close to Hezbollah on suspicion of fraud after he invested hundreds of millions of dollars of other people's money before declaring bankruptcy, judicial officials said Wednesday.

Salah Ezzedine gave himself up to authorities earlier this week after declaring himself bankrupt. The officials said he was then taken into custody and is being investigated for possible crimes including the fraud of large amounts of money.

He has not been formally charged yet.

The case has drawn comparisons in Lebanon with that of Bernard Madoff, the New York failed financier whose multibillion-dollar Ponzi scheme wiped out thousands of investors and charities worldwide. Madoff was sentenced in June to 150 years in prison.

Ezzedine, a wealthy businessman from the town of Maaroub near the southern port city of Tyre, is a prominent financier particularly among Shi'ite circles in Lebanon. He is the owner of Dar Al-Hadi Publishing House - one of Lebanon's most prominent publishing houses of religious Shiite books which also prints books written by Hezbollah officials - and al-Hadi TV for children.

Employees at the publishing house have refused to speak to reporters about the case.

An official with close links to Hezbollah confirmed to The Associated Press that Ezzedine has extensive connections with senior members of the group but could not say whether any senior members had business dealings with him. The official spoke on condition of anonymity because of the sensitivity of the subject.

The judicial officials said Ezzedine had major business interests, particularly in oil and iron industries, in Eastern Europe and suffered substantial losses when oil prices dropped starting mid last year.

He tried to make up for his losses by taking money from Lebanese investors, promising them up to 40 percent interest on their deposits which he could not repay, the officials said, speaking on condition of anonymity in line with regulations.

Many Muslims consider interest paid by banks as un-Islamic and therefore prefer to invest their money in businesses such as the ones run by Ezzeddine.

Media reports said among Ezzedine's victims are high ranking members of Hezbollah, as well as Shiite investors from south Lebanon and the Hezbollah stronghold south of Beirut.

Al-Mustaqbal daily said among those who filed charges against Ezzedine was Hezbollah lawmaker Hussein Hajj Hassan. Repeated calls by The Associated Press to Hajj Hassan went unanswered Wednesday.

It was still not clear whether Ezzedine knowingly deceived investors.

Ezzedine is also known for being a pious man involved in charity work. He headed an institution that organized pilgrimage trips to Muslims holy cities of Mecca and Medina in Saudi Arabia.