Dubai businessman arrested for Dh1.1 billion ponzi scheme
Amira Agarib /Dubai, Khaleej Times.
The businessman was arrested on December 21.
The Dubai police confirmed the arrest of an Asian businessman who allegedly embezzled Dh 1.1 billion from 7000 people who had invested their money in his company Exential Group. Most victims work in the aviation, oil and gas sectors and on an average invested Dh 125,000. Exential had approximately 18,000 forex accounts.
The deputy director of Al Barsha police station, Major Majed Al Swaidi, said that the businessman was arrested on December 21, referred to the Dubai Public Prosecutor and then released on bail. He cannot leave the country without repaying the money.
Al Swaidi said that many people lodged complaints at Al Barsha police station after the company was shut down by the Dubai Economic department last July as it didn't have a license. The complainants at Al Barsha police station have lost Dh 50 million.
Most victims of the scam said that their lives have been destroyed because they deposited most of their money. They said that they were enticed by the prospect of making profits in the range of 100-150%. They convinced their friends and family to invest in the company. The scammer soon stopped making payments.
Source:
Dubai businessman arrested for Dh1.1 billion ponzi scheme - Khaleej Times
Dubai: The Indian owner of a Dubai-based foreign exchange trading firm who had promised to double investors’ money has been arrested in the emirate for suspected fraud, a newspaper reported Tuesday.
Sydney Lemos, 36, from Goa, had been arrested on 21 December,
The National reported, saying he was behind the failed investment scheme worth 50 million dirhams ($13.6 million).
His firm, Exential Group, was closed by Dubai authorities in July, the daily said, adding that clients lost millions of dirhams when the group failed to pay out after promising the 100% return on their investments.
Source:
Indian businessman Sydney Lemos arrested for fraud in Dubai - Livemint
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Lets hope the investigation widens to include those actively encouraging others to join up, knowing full well it was a Ponzi.
If the company is unable to pay up, there is talk that lawyers are considering claw-back proceedings to recoup any money the early joiners gained from this illegal scheme ie. Illegally obtained gains.
Passport copies of all investors and the amount of money they received are believed to be on file in the offices.
Legally, the Ponzi scheme’s winners – i.e., those who withdrew more money than they deposited – can be compelled to return their fictitious profits to help defray the losses to the scheme’s losers. They are required to do so even if they did not know, and had no reason to know, that theirs was not a legitimate investment.
This is called a "clawback" which allows victims to seek the return of funds distributed to investors, even from those who were fortunate enough to have turned a profit or redeemed their investments before the schemes unraveled.
Many cases have won in court, whereas “net winners” are required to pay back past withdrawals to be redistributed to the larger pool of victims.
The chances of getting some money back are greatly increased when the names of complicit individuals are identified. Direct legal action can be taken against those who promoted, or enjoyed commissions from bringing in new clients.
The complicit members of a Ponzi scheme are known as "Promoters": the majority are aware the scheme is fraudulent, but they do their utmost to ensure the scheme stays alive as long as possible to maximise their profit.
Those who knew this was not legit and anxiously waited for 12 months to pass as to recoup their initial "investment", might just have many more sleepless nights ahead.