ABU DHABI // Almost 2,000 people that were caught up in a billion-dirham investment scam have come forward with financial claims of up to Dh310 million, prosecutors have said.
Fifty-four suspects have been referred to the criminal court over charges of fraud and money laundering since the investigation began almost a year ago.
The men were arrested on suspicion of scamming up to 3,700 people out of Dh1.3bn total. Eight of the suspects were caught with the help of Interpol.
The scam worked in two parts: the men would buy second-hand cars from their owners using post-dated cheques. They would then sell the cars to other victims and not deliver them. The scammers would use the money from selling the cars to pay back the previous investors whose cheques were due. This was to avoid revealing their scam if the victims tried to deposit the cheques, prosecutor Hassan Al Hammadi said.
The victims were lured in with the promise of 70 to 100 per cent returns on their investments within six months, said Mr Al Hammadi.
Police first began investigations 11 months ago after receiving more than 400 complaints within five days.
The first batch of arrests took place on February 20, last year when police took 22 suspects into custody.
The suspects included agents, middle men and owners of car showrooms who would lure the victims into dealing with the main defendant, who was behind the entire operation.
Investigations showed that the scammers would sell at least one car per day which was subsequently re-purchased by the dealership owners several times, Abu Dhabi attorney general Ali Al Balushi said.
The suspects would buy expensive cars and special car licence plates with the victims’ money. They also bought real estate and stocks with one even purchasing camels valued at Dh10 million.
Police seized a total of Dh53 million in cash from the gang members’ homes and at car showrooms. Another Dh100m in their bank accounts was frozen, police said.
During public prosecution’s investigations the accounts of 23 defendants were unfrozen for so they could support their families, said Mr Al Hammadi.
Overall the authorities seized Dh160m and 395 cars from the defendants.
Prosecutors have arranged to sell the seized cars, which are expected to bring Dh52 million, in an auction and use the funds towards their case, Mr Al Balushi said.
He said the scam is the first case of investment fund fraud in Abu Dhabi in five years.
