How an MLM scam triggered a country into a civil war

1997 albanian crisis



An in-depth story about how Albania dragged itself into ‘a period of statelessness and complete chaos’ after a series of massive financial collapses of multilevel marketing (MLM) businesses in 1997, ending up with nearly 4,000 casualties, a brief military intervention from UN peacekeeping forces, and numerous brutal massacres on both the civilian and security apparatus.

May this dark historical experience, despite its tragic consequences, serve us a priceless lesson that wealth never comes rapidly.

Read the complete article in Wikipedia.




In 1992, the Democratic Party of Albania won the first free elections in Albania, and Sali Berisha became president. In the mid-1990s, Albania was becoming a liberalized economy, after years under a controlled economy. The rudimentary financial system became dominated by Ponzi schemes, and government officials endorsed a series of pyramid investment funds. By January 1997, the schemes (actually fronts for laundering money and arms trafficking) could no longer make payments. The number of investors who had been lured by the promise of getting rich quick grew to include two-thirds of Albanians. It is estimated that close to $1.5 billion was invested in companies offering monthly interest rates ranging from 10 to 25 percent, while the average monthly income was around $80. People sold their homes to invest the proceeds, and immigrants working in Greece and Italy transferred additional resources to the schemes back home.