Witnesses for the defence of 54 men charged with involvement in what is believed to be the biggest investment fraud ever uncovered in Abu Dhabi will begin to have their testimony heard on Sunday, the Gulf News has reported.
According to the publication, estimates are that the scam was worth at least Dh1.3bn (£267m), and could have defrauded more than 3,700 people, in what is said to be Abu Dhabi’s biggest-ever investment scam, with profits hidden as cash and by buying goods from luxury cars to camels.
The Ponzi-style investment scheme was run by three principals and an agent, with one described as the “main defendant”, though a further 50 men, mostly Emirati, have been arrested and charged. Eight were tracked down with the aid of Interpol.
Almost 2,000 people have so far come forward to claim that they were swindled in the scam, which was an elaborate Ponzi-style investment scheme disguised as a legitimate car-trading fund.
Prosecutor Hassan Al Hammadi said that the scheme worked in two parts. The men would buy second-hand cars using post-dated cheques. They would then sell them to other victims but not deliver them.
The money from the sale would be used to pay back previous investors, The Khaleej Times previously reported.
Police said the three people who managed the scam disguised as car dealers and hoped to make sizeable returns from selling cars on credit.
Prosecutors said a total of Dh53m (£10.9m) in cash was seized from the men’s homes and at car showrooms they owned.
“Another Dh100m (£20.5m) in their bank accounts was frozen,” said prosecutors.
Officers said the fraudsters promised the investors a 100% return on their money, though this subsequently changed to 70-80%.
One of the accused had admitted to authorities that he was part of an unlicensed investment business with fraudulent intentions, said the prosecutors.
They added that 423 vehicles were seized in 16 showrooms and 3,700 post-dated cheques were seized.
Investigations showed that the gang lured customers to buy cars from them and later they would encourage them to sell the cars through them at a higher price by offering them big profits.
The accused allegedly issued post-dated cheques to the investors. Those people who joined invested first received the promised profit, which encouraged others to join the scheme that went on for a few years, according to authorities.
Luxury cars and camels
Investigations also revealed that the defendants later took possession of all the investors’ money. They used part of the cash to buy luxury cars and special car numbers.
“Many of the accused also purchased properties and shares. One of the men bought camels worth Dh10m (£2.1m),” said prosecutors.
The UAE Penal Code punishes those convicted of fraud with up to three years in jail, while money laundering is punishable by imprisonment for up to ten years.
The authorities have so far seized Dh160m (£32.9m) and 395 vehicles — and prosecutors have arranged to sell the seized cars and use the funds towards the case.