UAE investors caught up in Bitcoin and Bar Works financial scams
UAE residents have described losing their life savings after being caught up in a financial scam that sold bogus workspace developments across the globe.
The collapse of Bar Works and the high-profile arrest of New York-based British businessman Renwick Haddow has exposed how investors paid millions into a suspected Ponzi scheme.
At first glance, it looked the perfect opportunity to secure their retirement plans, pay for their children’s education or help buy their first home.
Just months after handing over their life savings, as many as 150 investors are facing huge financial losses following the collapse of a US start-up company selling bogus workspace developments around the world.
Losses of $15 million (Dh55 million) are estimated from UAE investors alone, with global debts expected to top $40 million (Dh147 million) after hundreds of investors piled money into Bar Works.
Engineers, doctors and lawyers have all come unstuck from their investments, including Kamal Singh, who works in Abu Dhabi.
The father of two stands to lose $150,000 (Dh550,000) – money he had been saving to build a family home back in India.
“I was working in a nearby building in Abu Dhabi and saw this big Indian company selling investments, so I went in to take a look. It was the worst mistake of my life,” he said.
“We exchanged business cards, and later received an email asking me to invest in Bar Works. It looked a good opportunity.
“The returns were about 12-15 per cent a year. On exit, either after two years or ten years, we were to receive a further 25 per cent. We were told the plan was bomb proof.”
The hotel seminar Mr Singh attended was one of hundreds of similar events held around the world in Singapore, India and Hong Kong, selling similar investment opportunities into Bar Works.
The American company claimed to provide workspaces in old bars and restaurants, but in fact primarily sold leases coupled with sub-leases that together functioned like investment notes.
The man behind the alleged con is Briton Renwick Haddow, a New York-based businessman with a murky track record in nefarious financial dealings.
Haddow, 49, was arrested in Tangiers this week after a notice was issued by Interpol.
His is charged with securities fraud in the US for allegedly cheating investors in what turned out to be a fake Bitcoin trading platform, and the Bar Works business model.
Whilst detail of the Bar Works case may read like the latest international crime novel, the reality is scores of investors stand to lose their life savings.
Mr Singh was sold two units in San Francisco, at a cost of $60,000, and a further nine units in Istanbul, taking his total investment to $150,000.
“So many others have fallen into this trap,” he said. “We only knew of the involvement of Renwick Haddow after the problems started.
“The $90,000 I have invested is a bank loan, so I’m paying back Dh8,000 a month.
“It’s a huge commitment. Everyday I go to work I don’t think I’m working for my kids but to pay back this loan.”
Richard D’Souza, an investor living in Karama and working in the paint industry, invested $55,000 with his wife.
“Some friends of mine in the US did some due diligence and said Bar Works was a similar scheme to others that had been very profitable,” he said.
“I was getting a monthly return until January, about $292 a month.
“In December, they called again and said the California operation was up and running and asked if my wife would like to invest. It was all of our savings for retirement.”
When the payments dried up, Mr D’Souza tried to contact the broker who had sold him the deal. He called and left messages, but nobody replied.
“I finally got hold of one of them who said they had left the company as they had been working without a visa,” he said.
“Then I realised something was wrong. I asked for a meeting and when I arrived, there were about 150 people there all asking the same questions as me.”
A Syrian doctor who works at a major Abu Dhabi hospital, who asked not to be named, lost $30,000 – money he had saved to educate his four children.
“They said It would be a good investment, and they tried to push me for more money,” he said. “I’m glad I only lost $30,000.”
Jocelyn Houghton, 29, worked in Dubai for Emirates airline as cabin crew and managed to save up $50,000 to put towards her first home.
She was warned off investing in other notorious scams in Dubai, such as Exential and UTMarkets, but was persuaded to pile all her savings into Bar Works.
“My money was sitting in a bank account in Dubai, and I wanted to invest in something,” she said.
“I was approached by an agent, and I told him it had to be a sound investment.”
As a trained lawyer, Ms Houghton did her own research into Bar Works and it seemed legitimate.
“I became cabin crew as I couldn’t find work as a lawyer in Dubai,” she added.
“The money was my life savings. I was told I would get 125 per cent return on my investment over three years.
“The agent became my friend, we would go out for coffee or lunch, and he was developing this bond to get me to invest.
“It was very attractive, so I signed up. It was everything I had in the bank, I thought it was all legitimate.”