Employee tells of $300m investment scam

DUBAI // A former employee of a $300 million bogus foreign-exchange trading scheme has told of being hired with no financial experience and handling ac- counts for 500 clients who invested at least $20,000 each. The company behind the scam, Exential, promised investors they could more than double their money. Regulators in Dubai closed it down last year after complaints by clients, some of whom lost their life savings.

“There were legitimate companies involved in the transactions who, like some of us, had no idea it was a Ponzi scheme,” the former employee said. “Some brokers and major banks were based in Australia, Mauritius and the British Virgin Islands.

“When they found out, the operation began to get into real difficulties as they withdrew their services.”

Exential Group in Dubai Media City was ordered to cease trading in July by the Department of Economic Development after complaints by investors that due payments had dried up.

The firm promised annual returns of up to 120 per cent, but investors who have tried to close their accounts remain unpaid.

Many, most notably Emirates airline cabin crew, invested their life savings and took out bank loans to invest more.

Money was transferred to three Exential companies – Exential Mideast Commercial Brokers, Exential Mideast Investment and Tadawul ME – then transferred to accounts in Australia owned by a partner company.

When those accounts were frozen, investors were told banking compliance issues had delayed their payments.

“This was like a bull race,” the former employee said. “When one person opened an account, the rest charged in. There were people at Emirates who were selling accounts and making huge monthly commissions from new investors.

“It was not difficult to get people to invest Dh80,000 to open an account. Those who got in early made their money 10 times over. One introductory broker would get Dh70,000 to Dh80,000 a month in commission by recommending new investors. “Some people had as many as 500 accounts. From January until November 2015, we were opening between 1,000 and 1,200 accounts every month. I only found out it was a scam in April last year.”

In March last year, Exential emailed investors asking them to top up accounts with $5,000.

“People lost their life savings,” the ex-worker said. “When they turned up at the offices, some were very aggressive. We called police most days.

“Some would just sleep outside. That went on for months.”