Bar Works suspect accused of losing UAE clients millions of dirhams to face US court
British national Renwick Haddow is facing 40 years in prison for alleged scams that targeted scores of UAE investors
Prosecutors in the United States are considering what formal charges should be bought against a British man who UAE investors claim cost them millions of dirhams.
Renwick Haddow was arrested in Morocco in 2017 and later extradited to the US to face two allegations of wire fraud.
Legal officials in New York are currently deciding what charges he will face when he stands trial.
Haddow, who is facing 40 years in prison if found guilty, set up elaborate investment schemes in Bitcoin and a US based hot-desking business called Bar Works.
The scheme sold bogus investments in unused restaurants and bars in New York, San Francisco and Istanbul as temporary office space.
A hearing into his case has been postponed six times so far as court officials continue to assess the detail of the allegations and evidence.
The latest hearing was on November 7, when the US Department of Justice filed a brief letter to the New York Southern District Court stating a criminal case against Haddow has not yet been indicted.
More than 100 UAE investors claimed to have lost millions of dirhams in the alleged scam after being sold investments in Bar Works from brokers based in Dubai and London.
Kamal Singh, who lives in Abu Dhabi, was one of those investors who lost more than $150,000.
“I am waiting for the ongoing case in the USA against Bar Works to conclude to see if we can get something out of it,” he said.
“All of my efforts reporting this in the UAE to CID, the police and documenting evidence in Arabic and attestation has been in vain so far.
“The Abu Dhabi Public Prosecutor decided that I don’t have a criminal case against the brokers who sold the investments to me here in the UAE.
“I can apply for a civil case, but then I need to put good money after bad and I’m still in debt due to the losses I incurred investing in Bar Works."
The UAE authorities have sought to tighten regulations governing the selling of financial products, including capping commission fees last year and ordering telling banks and finance companies to resolve all outstanding mis-selling complaints “amicably” within just 90 days. Financial advisers - who make about 70 per cent of their income from initial fees and commission charges - have felt the strain as a result.
But Mr Singh said he still wants to see "stronger regulations against those who promote offshore investments, who can get away easily if it turns out to be scam".
"I had trusted my agent's marketing pitch and had email assurances from them," he said.
Mr Singh was sold investments through a UAE-based broker, Square Yards.
Square Yards told investors they were only made aware of the FBI investigation into Bar Works just weeks before Haddow was arrested in Tangiers.
Brokers would cold-call clients offering grand returns on their investments up to 125 per cent, while Haddow ran the scheme operating under the pseudonym ‘Jonathan Black’.
Haddow was picked up by FBI officers in Tangiers, Morocco and arrested on suspicion of stock market fraud and other cyber-crimes. He was imprisoned there until an extradition order was granted to move him to the US in April.
The case is now moving through the US judicial system, although progress has been slow.
Frustrated investors are unsure if they will ever see their money again, despite many following up on legal action against the brokers who sold them investment plans.
Haddow was experienced in financial dealing and had previously set up a car-sharing app. He had a long history of deception in the UK, before turning his attentions to overseas investors.
Legal papers in the UK show Haddow was disqualified from serving as a director of any UK company for eight years in 2008, and five years later the UK financial conduct authority pursued a civil action against him.
In 2015, the British court of appeal upheld a ruling that Haddow had been running unauthorised investment schemes that raised £16.9 million (Dh80.6 million) through misleading statements to investors.
Reports in the US show Haddow established crowd funding portal InCrowd offering investments in start-up businesses.
Court papers there from 2015 revealed Bitcoin Store, another of his scams, had raised more than $700,000 (Dh2.5m) from investors, and at least $590,000 (Dh2.2m) had been paid to Haddow from the InCrowd scam.
Bar Works was owned and controlled by Haddow, who had purchased 20 million of its shares for just $2,000 (Dh7,300).
Although little is known of his private life, before his arrest in Morocco – he lived in New York and Hong Kong, where court papers listed his address as The Ellipsis, a flash penthouse complex in the Happy Valley district.
In October, a New York magistrate ordered a 30-day continuance of the case in the interest of justice. It was the sixth such order to delay any decision on the charges against him.
Updated: November 16, 2018 10:27 AM