x Abu Dhabi, UAEThursday 27 July 2017

Men accused of Dh2.3bn investment scam deny charges in Abu Dhabi court

The three main perpetrators and an agent are currently in police custody while the remaining 47 have posted bail.

Fifty-one, mostly Emirati, men accused of scamming thousands of people out of Dh800m plead not guilty of fraud and money laundering at the Abu Dhabi court of Misdemeanours on Monday.

The three main perpetrators and an agent are currently in police custody while the remaining 47 have posted bail.

The scam began after one of the men needed money to pay off a debt. He purchased a car and paid for it using a post-dated cheque.

He then sold the car and paid off his debt. When it came time for the check to be cashed, he bought another car with a separate post-dated cheque and sold it to pay off the first cheque to the first seller, prosecutors said.

The man then expanded his scam and advertised for an investment fund when he would repeat the process with thousands of victims.

The scam grew to involve four fake investment funds run by two other defendants.

The men recruited dozens of agents to advertise investment opportunities with a promise of 70 to 100 per cent returns. The men used a car showroom as a cover for their scam.

Police first began investigations a year ago after receiving hundreds of complaints from the men’s clients.

The first complaint was filed on February 19 this year and following investigation, police discovered that the men were not operating a legitimate business but were only rotating the money between their clients.

So far prosecutors have received 1,909 complaints and the money deposited by the victims amount to Dh 800 million.

The financial claims filed by the victims, including the deposited amount, amount to Dh 2.3 billion.

When the defendants were caught, police seized Dh160m from them, and 395 cars. Public prosecution has begun procedures to sell the confiscated cars, which are expected to bring more than Dh52m at an auction. The proceeds will be used towards the case.

On Monday, one of the men denied charges of fraud and money laundering.

“I did not steal people’s money, I simply bought their cars, and I have a commercial license to buy and sell cars,” he said.

He and the agent asked to be released on bail.

 “Why am I in jail?” the agent asked the court.

“I should be bailed out like the rest of the defendants,” he said.

The third man has also been charged with possessing three air guns without a license, which police found while inspecting his home.

He admitted to the charge in court.

Seventeen defence lawyers attended the session and requested to copy the case files and an adjournment to prepare their cases.

The case was adjourned until August 7.