Currency scam victims can claim for lost cash

▶ Investors in the Exential plan have until Friday to start claims process

Investors who lost millions of dirhams in a foreign exchange currency scam in Dubai have until Friday to submit a claim to recover lost cash.

A court in the British Virgin Islands appointed liquidators from international auditors KPMG to take over Exential Investments Inc, once based in Dubai Media City.

Filipino churchgoers and cabin crew were among the thousands of people conned out of large sums of cash by a network of Indian scammers who offered to manage fake foreign exchange trading accounts.

Investors were promised impossible returns of 120 per cent on $20,000 (Dh73,500) accounts in the five-year Ponzi scheme that imploded in 2017.

Investigators who looked into the case after it was first reported in The National in 2016 claim thousands of investors collectively lost up to $500 million in the scheme.

“We understand more than 7,000 investors spread across the globe were induced by the scheme and parted with what is expected to be in the region of between $300-500m,” said David Standish, head of contentious insolvency at KPMG.

“We will work with our international network within KPMG and others to trace and secure assets which can be realised. The ultimate goal is securing a return for those who have fallen victim of this sophisticated alleged Ponzi scheme.”

Exential Investments Inc, which was registered in the British Virgin Islands, was incorporated on April 26, 2012.

Along with other group companies such as the Exential Group, the business purported to provide foreign exchange investment services. In reality, investors were paid a percentage of cash deposited by new investors.

The model bore hallmarks of a classic pyramid scheme, with only those at the top benefiting financially.

Alarm bells sounded for investors in 2016 when they were unable to withdraw funds, or received minuscule returns.

Many lived in the UAE and – despite the financial turmoil – new investors continued to pile money into the doomed scheme in early 2016. That ended when the operation was shut down by the Department of Economic Development in Dubai in July that year.

The company was struck off in the British Virgin Islands the following February after its registered agent resigned.

Scores of civil cases were submitted against the company, with Dubai Courts issuing a landmark judgment against Exential in favour of one Filipino cabin crew member in April 2017 for Dh1m.

That figure was never paid out because company assets had already been hidden in accounts around the world.

Investigations culminated in the 2018 arrest of two men who were heavily involved in selling fake accounts to hundreds of Dubai residents.

Sydney Lemos and Ryan Fernandez have served two years of a 513-year sentence. So far, these are the only convictions in what is known by investigators to be a complex global network of fraudsters.

On July 27, a British Virgin Islands court heard evidence from creditors and Bill Ferguson of UK-based Carlton Huxley, one of the lead investigators given the job of finding company assets.

“We have a number of ongoing live inquires which can now be pursued vigorously by the liquidators,” Mr Ferguson said.

A judge said investors have until August 14 to submit a claim with the appointed liquidators.

More than 250 investors, most from the UAE, contacted Carlton Huxley with victim testimonies.

Since then investigators have travelled to India, Australia, the British Virgin Islands and the UAE to conduct interviews and locate assets owned by the company.

That information has now been passed on to liquidators who aim to redistribute company assets to investors.

Barney Almazar, a Dubaibased lawyer who represented victims in civil claims against Exential, said it could be some time before cases are resolved.

“I encourage all investors, especially those who have already secured a court ruling and pending execution orders, to register their claims,” he said.

“Before any repayment is made for their investments, they will need to give the liquidator sufficient information to prove their claim.

“They should attach copies of their investment agreement, court decision, execution order and relevant supporting documents as claims may be rejected if there is insufficient evidence to support it.”

The liquidator will notify victims if there are likely to be funds available for distribution.

Claims will be paid on a pari passu basis, which means they are equal in right of payment.

Creditors can contact liquidators at exentialbvi@kpmg.co.uk or +44 (0)20 3078 3034.