About the $200 Million Investment Scam in the UAE

The UAE has recently experienced a surge in investment scams. Scores of people have lost their hard-earned savings in these scams. And the worst part is that they continue to happen unabated with several million dollar scams coming to the limelight every year.

One recent investment scam targeted cabin crews of an airline company siphoning off about $200 million (Dh734.5 million). The sum is alleged to have been collected by the Dubai branch of Exential Company.

Under the Magnifying Glass: The Million Dollars Scam in the UAE

A private British legal company named Carlton Huxley investigated the scam. It found that the culprits were not only located in the UAE, but also in other countries including India, British Virgin Islands, and Australia.

The investment scam was discovered at the beginning of last year. Reports show that the cabin crews, mostly expats, were offered significantly high returns on their $25,000 investments. The returns promised on the investment were as high as 120 percent. Hence, many airline crew members had taken out loans to make the investment. However, later on it turned out that it was nothing more than an investment scam.

The main protagonist of the scam was an Indian named Sydney Lemos who is currently detained in the country. Another partner of the crime who is held in jail was said to have more than 100 accounts containing $2.2 million.

Exential was just one of the three companies that were used as a platform for the investment scam. Investors were reached through three other companies including Tadawul, Mideast, and Mideast Commercial Brokers, whereas the cash was funneled through three investment brokers namely FCI Markets, Ellipsys, and S&S.

Exential Investment Scam In Perspective

The Exential investment scam in the UAE bears resemblance to the UMT Markets scam that was run by British and Bulgarians. UMT Markets ran a foreign exchange scam that left hundreds of investors out of pocket.

According to a representative of Carlton Huxley, scams are becoming common in UAE. The tactics used are similar: a firm is registered with the local financial regulatory authority to add credibility to its operations. A spin-off company is then set up under a blanket name that targets a certain group of people, which in the case of Exential were the cabin crews. In most of these cases, the investors have recourse in getting back their invested amount.

Expats are particularly advised to stay wary about any investment scheme that offers substantially high returns. Also, it’s advised to avoid investing in companies that claim to a branch of a registered financial company. Since these companies are not regulated by the financial authority inside or out of the UAE, investors can’t take any legal actions against them.

Posted On November 1, 2017