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Abu Dhabi, UAETuesday 11 December 2018

A 500-year sentence shows fraud will be met with the iron fist of justice

Yet the 500 years will end up only symbolic without the chance of restitution for victims

Fraudsters target those in Dubai and elsewhere in the UAE hoping to work hard and provide for their families. Giuseppe Cacace / AFP
Fraudsters target those in Dubai and elsewhere in the UAE hoping to work hard and provide for their families. Giuseppe Cacace / AFP

Some might have considered the length of the sentence issued to two fraudsters this week an extraordinary decision. However, the pair, who fleeced $200 million from up to 7,000 UAE residents, merited the harshest penalty. While thousands of residents plunged their life savings into the Exential foreign exchange investment scam, Sydney Lemos – who spearheaded the firm’s Ponzi scheme – was living a James Bond-style existence on their money. Such was the scammer’s moral decrepitude that he was buying motorbikes, apartments and ostentatious cars bearing 007 number plates while his victims waited endlessly for a payday that would never come. Lemos and his associate Ryan Fernandez each received 500 years in prison, sending a powerful message that financial crime does not pay.

Through the Ponzi scheme, the pair vowed to more than double an initial $25,000 investment using a complex foreign currency algorithm. Money from new investors was used to pay off longer-term investors at the top of the pyramid until payments dried up and investors panicked. By the time the Department of Economic Development closed the Dubai Media City firm in 2016, their precious savings were gone and they were left destitute. Investigators are now searching for the bad-faith investors, who knowingly recommended the scam to others, enriching themselves in the process. The cynical nature with which Lemos and Fernandez pursued vulnerable people makes their crimes particularly grim. Among their numerous victims were cabin crew members and a church group, which yielded 90 investors. Many of them were able to take out large loans to opt into the scheme, which raises searching questions about the moneylenders who loaned huge sums of money without querying whether they could pay it back. Unable to afford extortionate legal fees, thousands of investors are now dealing with the heartbreaking reality of being unable to recoup any of their money. The sentence, while a stern warning, is symbolic only without the chance of restitution for many who have lost out.

With a lack of financial literacy among some of the population, there has been potential for exploitation in the UAE, as these pages have previously reported. The court case follows the conviction of financial adviser Neil Grant, who ran a company without a licence. His victims, who lost hundreds of thousands of dirhams, have since launched a civil case. Most of those targeted by fraudsters will never recoup their losses but Sunday’s sentencing at least demonstrates that such mercenary behaviour will be met with an iron fist.