Group of 51 ‘defrauded Dh2.3bn from thousands of investors’

Fifty-one men accused of scamming thousands of people out of Dh800 million yesterday denied charges of fraud and money laundering.

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

Prosecutors told the Abu Dhabi Court of Misdemeanours that the scam began after one of the men needed money to pay off a debt. He bought a car and paid for it with a postdated cheque.

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

He then expanded his scam and advertised an investment fund that would allow him to 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.

They 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 police discovered that the men were not operating a legitimate business and were simply rotating the money between their clients.

So far prosecutors have received 1,909 complaints, while the money deposited by victims amounted to Dh800 million. The financial claims filed by victims, including the deposited amount, come to Dh2.3 billion.

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

Yesterday, 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 licence 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. “I should be bailed out like the rest of the defendants.”

Seventeen defence lawyers attended the session and asked for an adjournment

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