US court finds Afghan citizen Dost guilty of fraud

A US federal court on Tuesday found Azam Dost, former owner of a now-defunct marble mining company, guilty of defrauding the Overseas Private Investment Corporation (OPIC), and defaulting on a $15.8 million loan.

After a seven-day trial, Dost, 40, a resident of California, was found guilty on three counts of major fraud against the United States, eight counts of wire fraud, four counts of false statements on loan applications or extensions and five counts of money laundering.

He is scheduled to be sentenced on December 14 by US District Judge Amit P. Mehta of Columbia district, who presided over the trial.

In February 2010, while working at his company, Equity Capital Mining LLC, Dost, along with his brother, obtained a $15.8 million loan from OPIC for the development, maintenance and operation of a marble mine in western Afghanistan.

The loan proceeds were paid directly from OPIC to the alleged vendors who provided equipment for the mine, as reported by Dost or his consultant.

He was required to deal with these companies in arms-length transactions and to report to OPIC any affiliation he had with a vendor.

Instead, Dost falsely informed OPIC that he had no affiliation with any of the vendors with whom he dealt, when in fact he had financial relationships with several of them, federal prosecutors alleged.

Evidence showed Dost’s business partner was listed on the bank accounts for a number of these vendors and, upon receipt of money from OPIC into the respective accounts, significant amounts were transferred to companies and individuals with whom Dost was associated, or to pay debts he owed.

For example, his consultant received a commission of $444,000 for purported services with the first of three disbursements from OPIC, yet $40,000 was transferred from the consultant’s account to a Dost company in California.

When the time came for Equity Capital Mining LLC to repay the loan, Dst provided purported reasons to OPIC why he was not able to make the repayments at a time when he had control of sufficient funds.

Dost and his brother failed to repay any of the principal amount of the OPIC loan, paying only a limited amount of interest and this defaulted on the loan, the evidence showed.