Ponzi scheme victims take comfort from sentencing

The sentencing of Sydney Lemos and Ryan Fernandez will bring some comfort to the hundreds of people who invested their savings and money borrowed from banks with Exential Group, a Ponzi scheme.

The Dubai foreign exchange trading scheme seemed like a sure investment, promising annual returns of up to 120 per cent.

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 particular trading algorithm.

But it was new investors’ money that was used to pay returns for earlier investors. In July 2016, the Department of Economic Development ordered the company to cease trading while it investigated complaints from clients that their payments had dried up.

Filipino church groups, Emirates airline cabin crew and many others looking to build a nest egg found their money tied up in offshore banking systems, in accounts that they could not access.

Before sentencing, the victims’ lawyers said that the case was rapidly moving forward, and when assets had been locked down and a court judgment issued, companies appointed to hunt down the investments could soon recover the cash.

Last year, a Dubai court ordered the rogue company to repay Dh1 million to a Filipino cabin crew member in what lawyers called a

Those seeking assets say there are bigger players and Lemos is taking the rap for them

landmark decision.

“Exential tried to baffle their clients with jargon to make it difficult for them,” said Barney Almazar, head of legal aid at the Philippine embassy.

“They claimed they were not the ones who invested the funds but they were the ones who had been given the cash, so they were equally liable for the losses.

“Most of the investors borrowed a lot of money so they did not have the cash to fund a trial, and a local lawyer is very expensive.”

In one church group, more than 90 parishioners together invested more than Dh6m.

Those on the trail of assets hidden around the world said Lemos, from Goa, was a fall guy, and there were bigger players behind the scenes.

“Those involved, including those in the client base, have not always been honest with us,” said Bill Ferguson, the lead investigator for legal firm Carlton Huxley.

“We think Sydney Lemos is taking the rap for others and he is not as guilty as many people assume.”