KABUL, Afghanistan — In a big day for development here, a notable Afghan businessman stood with top government officials on Wednesday as he signed the contract for a new township: 8,800 homes across 33 acres of prime real estate in the heart of the capital, with an initial investment of at least $95 million.

There was just one problem: The businessman, Khalilullah Frozi, is supposed to be serving a 15-year prison sentence for his role in defrauding Kabul Bank of nearly $1 billion of depositors’ money. The scheme brought Afghanistan’s biggest bank, where Mr. Frozi was listed as chief executive, near collapse in 2010, and it deeply shook trust in the Western-backed financial system here.

But Mr. Frozi, it seems, will be spending his days making money while he serves his sentence at night.

Five years after the banking scandal, the apparent unwillingness of the Afghan authorities to deal firmly with the perpetrators is perhaps one of the most glaring examples of Western impotence in the fight to clean up a system that the United States, chiefly, built and paid for.