A fraudster handed 500 years in prison for his role in a $200 million exchange scam has launched an appeal against his sentence, one of the heaviest ever issued in the UAE for a financial crime.
Sydney Lemos is understood to have initiated a costly appeal against his jail term for his role in the Exential Ponzi fraud.
The Indian family of Lemos has instructed lawyers and claimed he was running a legitimate foreign exchange business.
Legal advocate Wilbur Menezes told the Times of India that Lemos was merely guilty of a civil wrong, and not a criminal act.
“Sydney Lemos was running a legitimate forex trading business wherein customers knew the risks involved, in furtherance of which they entered into agreements," he told the newspaper.
"At the most, the actions may make out a civil wrong for contractual breach."
Lemos was jailed in April alongside colleague Ryan Fernandez. They were jailed for a year each over more than 500 criminal cases.
The finger of blame has been pointed at other Exential relationship managers by Lemos’s wife, Valany, who left Dubai for Goa in January 2016 and hasn’t returned since.
The appeal came as investigators urged victims to submit official legal claims and evidence of lost investments to help them claw back the missing funds.
Exential’s clients have also been advised to submit a ‘proof of debt’ letter by liquidators dealing with the collapse of parent company FCI Markets, to give them the best chance of recovering their cash.
Court-appointed liquidators Kalo, of the British Virgin Islands, and UK financial investigators Carlton Huxley, claim to have recovered assets worth more than $6 million. They are trying to recoup millions more.
Letters have been sent to investors known to have had a financial relationship with FCI Markets, to establish who is entitled to a share of the recovered money.
“This is the first part of a several stage process in getting money back for the victims,” said William Ferguson, lead investigator for Carlton Huxley.
“Not everyone will have got these letters because not everyone is shown as having a relationship with FCI Markets.
“It is imperative that people receiving these letters fill them in quickly and accurately and get them submitted as soon as possible.”
Investors ranged from Filipino churchgoers and Emirates cabin crew and many others looking to build a nest egg.
Exential's managers set out that for a US$25,000 (Dh91,825) deposit, an account could be opened with the money invested in foreign currency, and traded when markets fluctuated using a complicated computer algorithm.
Profits of up to 120 per cent were promised.
In reality, any profits that were paid out were from the deposits of later investors, what is described as a classic Ponzi scheme, rather than actual profits.
Early investors profited significantly, to the tune of about $2.5 million, including those who encouraged friends and colleagues to sign up.
The focus has now shifted towards those ‘bad faith’ investors who knew the scheme was doomed to failure.
Mr Ferguson, who has been working on behalf of Exential clients since November 2016, said others could yet face criminal charges for their role in the fraud.
__________________
Read more:
Exential background: No end in sight yet for victims of a scheme that conned hundreds in Dubai
A 500-year sentence shows fraud will be met with the iron fist of justice
____________________
“It is very important people understand Sydney Lemos is the face of Exential, but not the ultimate controller,” he said.
“We know who and where the masterminds of Exential are and the net is closing around them.
“They will not be able to hide behind their veneer of respectability and claims of being legitimate business people.
“Unless they approach us and start some serious efforts to work with the international liquidators and lawyers they must expect a similar fate to Sydney Lemos.”
One of the lawyers acting on behalf of scores of Exential’s clients is Barney Almazar, director of corporate-commercial department of Gulf Law in the Middle East and Philippines.
“Perpetrators of financial crime are not your ordinary criminals - they are sophisticated enough to know the financial sector and are taking advantage of the safeguards,” he said.
“This is to avoid detection and prevent victims from discovering where the criminal proceeds have been hidden.”
In the UAE, victims of financial crime can directly claim compensation for their losses under the Criminal Procedures Code.
The code grants those who have suffered a direct loss as a consequence of the crime to file a civil claim at any stage before the criminal court.
Local judgments awarded in favour of Exential’s clients in the UAE can also be executed in foreign jurisdictions where the funds can be traced.
“It’s ironic these criminals are using their victims’ money to prolong the case and evade justice,” said Mr Almazar, who said it would be difficult to prove criminal intent of those who encouraged others to invest.
“Most of the victims have in one way or another referred someone.
“The very nature of this scheme was to encourage your friends, family, colleagues and basically anyone to invest.
“Simply encouraging others to invest is not punishable by law. Criminal intent must be established first before a person can be prosecuted.”
