Dubai investors go to court in US over lost cash

Investors say they were solicited to invest millions into 'highly recommended investment company' through the Dubai Ferrari Owners Club.

Dubai , United Arab Emirates-  May 07, 2011: ( L )  Coline Jobe and  Guy Coghlan (R ) victims of  Ponzi Scheme pose during the interview in Dubai . ( Satish Kumar / The National ) Story by Martin Croucher
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DUBAI // Colin Jobe poured hundreds of thousands of dollars he had saved for his retirement into a highly recommended investment company. Now the 62-year-old faces financial ruin after being blocked from withdrawing his money from the fund.

He is one of at least 20 Dubai-based investors who have filed a complaint in the New York Supreme Court against Montague Morgan Slade (MMS), a company that the plaintiffs' lawyers claim acted fraudulently.

Also implicated in the complaint are Stephen White and Martin Kinsey, two Britons who operated a Dubai-based brokerage called ExPat Solutions, which are said to have had close links with MMS. Mr White and Mr Kinsey deny any wrongdoing.

Mr Jobe, a Briton who is managing director of the car rental firm Diamond Lease, says he invested Dh1.8m of his and his daughter's money in MMS after Mr White assured him the company was legitimate.

"I worked hard and saved for 11 years," he said. "That money was put aside for my pension. I haven't got time to save for another pension. It hurts so much for me.

"If I go back to the UK, I don't know what I'll do. I'm faced with living off the state because I've been cheated. Someone should put these men in jail because they will hurt someone else too."

The suit, in papers lodged in New York, accuses the MMS partners, Gordon Spedding, Anthony Heald and Michael Brown, of using investors' money "as if it was their own".

"The key overarching fact that must be understood in order to understand the MMS enterprise is that there is no MMS beyond the Wall Street virtual office," it states.

"In reading the prospectuses for MMS's various funds it is easy to forget that there is no fund, there are no files, there are no investments; it is all a sham created to cause investors to transfer money for the sole purpose of funding the scheme and stealing the investors' money."

The suit alleges that at one stage MMS was sharing an office with ExPat Solutions in Dubai. It also claims bank records show White and ExPat Solutions received more than Dh730,000 from MMS.

Mr White is said to have solicited investors for MMS through the Dubai Ferrari Owners Club, of which he was the events manager.

That was where he met Frans Plaggenburg, the chief executive of Dubai-based MK Investments, who went on to invest more than Dh6.38m in MMS and its subsidiaries through ExPat Solutions.

"What's unfortunate is that most of the people have known Stephen for a long time and he was considered to be a friend," said Mr Plaggenburg, also a plaintiff in the lawsuit. "Some of the people have known him for more than 20 years.

"All our investments were made on a trust basis. Unfortunately he took advantage of that trust and got us into this."

Mr White is now believed to be based in Prague in the Czech Republic, from where he is operating a new business with Mr Kinsey.

Mr White was unavailable for comment but has previously denied any wrongdoing and said he was an investor in MMS himself.

The civil suit was filed in New York as MMS operated what is alleged to be a virtual office from Wall Street.

The document, dated April 18, gives the respondents 30 days to reply.