ABU DHABI // Almost 2,000 people who were caught up in a billion-dirham investment scam have come forward with financial claims of up to Dh310 million, prosecutors 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 in 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 using postdated cheques. They would then sell the cars to other victims and not deliver them. The scammers would use the money from 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, said prosecutor Hassan Al Hammadi.
The victims were lured with the promise of 70 to 100 per cent returns on their investments in six months, Mr Al Hammadi said.
Police began investigating 11 months ago after receiving more than 400 complaints in five days.
The first batch of arrests were made on February 20 last year, when police took 22 suspects into custody.
They included agents, middle men and car showroom owners who would lure victims into dealing with the main defendant, who was behind the scam.
Investigations showed the scammers would sell at least one car a day, which was then repurchased by the dealerships several times, said Abu Dhabi Attorney General Ali Al Balushi.
The suspects would buy expensive cars with the victims’ money. They also bought real estate and stocks, while one bought camels valued at Dh10m.
Police seized Dh53m in cash from gang members’ homes and at car showrooms. Another Dh100m in bank accounts was frozen, police said.
During public prosecution’s investigations the accounts of 23 defendants were unfrozen so they could support their families, Mr Al Hammadi said.
The authorities seized Dh160m and 395 cars.
Prosecutors have arranged to sell the seized cars, which are expected to raise Dh52m at auction, and use the funds towards their case, Mr Al Balushi said.
He said the scam was the first case of investment fund fraud in Abu Dhabi in five years.