x Abu Dhabi, UAEWednesday 17 January 2018

Embezzled cash put into suspect fund

An embezzler invested some of his illegal gains with an institution that has itself become the subject of a fraud investigation.

An embezzler defrauded investors of more than Dh42 million with a bogus investment fund.
An embezzler defrauded investors of more than Dh42 million with a bogus investment fund.

DUBAI // An embezzler who invested some of his illegal gains with an institution that has itself become the subject of a fraud investigation was jailed for a year. The 28-year-old Emirati, RM, a Dubai Islamic Bank executive, was convicted last Thursday by the Dubai Court of Appeal of defrauding investors of more than Dh42 million (US$11m) with a bogus investment fund. JH, 25, a Lebanese executive of the same bank, was convicted of aiding and abetting the fraud, and will serve six months. He was alleged to have pocketed Dh115,895.

Two other DIB employees, AG, 42, and SJ, 32, were found not guilty of aiding and abetting. AG, an executive, had been accused of facilitating the swindle, while SJ, a strategic planning manager at the bank, was alleged to have pocketed Dh105,000. In an ironic twist, RM had deposited some of the embezzled funds with the Al Boom investment fund, whose chief executive, Abid al Boom, has denied charges of embezzling more than Dh900m from 3,700 investors.

According to the charge sheet, RM had been using forged documents since 2007 to persuade victims to put money in a non-existent investment fund. The crime, which came to light in August 2007, was discovered after a Kuwaiti investor contacted the bank, enquiring about his profits. An internal auditor at the bank told prosecutors the bank set up an investigating committee after the Kuwaiti's investment certificate was found to be a forgery.

Another bank customer, an Indian imam, MA, 50, also said he had been encouraged by RM to invest Dh300,000 in a new property fund offering returns of between 20 and 25 per cent. RM later asked him to sign papers because the bank was updating its systems. The imam said he did so without reading them and a month later found Dh265,000 was missing from his account. Prosecutors said RM had opened a bogus account under the alias Mark Elias. He transferred the embezzled funds into that account and then invested them in the names of his son and mother with the Al Boom properties fund.

A Sudanese legal adviser at the bank said when RM was questioned he admitted the fraud but claimed to have embezzled only Dh21m. However further investigations revealed the total to be more than Dh42m. The legal adviser said the other three defendants had all denied the charges when confronted. "SJ claimed to us that he did not work with RM but only had a three-year-old friendship with him," he told prosecutors.

Dr Ali al Jarman, the lawyer representing SJ, said his client was implicated only because he had borrowed money from RM. "The money was transferred to him from the disputed account and therefore he was held accountable," he said. "Currently we are trying to unfreeze his accounts, because since he was implicated all his funds were held by the authorities." amustafa@thenational.ae