Ponzi scheme leader pleads innocence, Verdict awaited

0
1713
Spread the love

AnEmirati man alleged to be the one behind the UAE’s largest fraud scheme has defended charges brought against him and pleaded innocence.

In total 94 people were charged, including AAQ, an Emirati, who has been sentenced to 5 years in prison. His lawyer described AAQ as an ambitious person who came into the spotlight during the economic boom of 2003.

The Ponzi scheme has been used to dupe more than 5,200 investors of hundreds of millions of dirhams.”It is wrong to invest money this way and I see it as a crime, but there is no law criminalising it, so it was put under fraud,” said AAQ’s lawyer Yousuf Al Sharif. “But it wasn’t fraud because he was giving people cheques and whoever wanted to withdraw their money was able to do so.

THE SCHEME

A Ponzi scheme involves acquiring investors, by making overrated claims about the returns they can obtain on their investments. In the current case people were encouraged to pay money into a property investment company that offered annual returns of up to 40. Some were paid for their first few months to encourage them to invest further.

Many sold their assets to invest into the scheme and encouraged their family and friends to give money. The defendants were convicted in February by the Abu Dhabi Criminal Court of fraud and forgery. The other defendants, included AAQ’s sister and two brothers who were also sentenced to prison for 2 years for assisting in fraud and possessing illegally obtained money.

The ringleader promised investors annual returns of 30 to 40 %, paid monthly and he had written more than 5,000 fraudulent postdated cheques to investors as a guarantee their investment was secure.

The accused is being scrutinized for taking money from apparent investors, and then paying them back, not from dividends obtained from investing, but from the funds collected from other victims. In his defense, Al Sharif said, “We cannot blame him for what he did, because it was the investors who went after him to put their money.

Only Dh29million has been handed back out of about Dh350m in assets, along with some 63 cars.

Sources: The National

Facebook Comments