The man who operated a AED 50 million ($14,00) foreign-exchange Ponzi scheme that duped thousands of investors in the UAE has been arrested on December 21, a UAE government-owned newspaper has revealed.
Dubai-based Indian Sydney Lemos, chief executive of a managed forex fund located in Dubai Media City, is facing a string of court cases after nearly 7,000 investors lost millions of dirhams when his Exential Group failed to pay out in what is being billed as the most brazen scam to have hit the UAE in recent years.
A senior investigator at Carlton Huxley, a UK firm of legal and law enforcement consultants, told The National that Al Barsha police arrested Lemos on Wednesday, December 21.
Airline cabin crew were one of the key groups targeted in Dubai in a bid to encourage more people to open up accounts with Exential. Each investor forked out a minimum of $25,000 per forex account after being promised annual profits of up to 120 per cent.
The total number of forex accounts held by Exential is estimated to be around 18,000. Multiple account holders include a senior executive at an oil and gas company who reportedly has 700 accounts of $25,000 each and a former vice-president of an aluminium company who has about 350. But when investors tried to close their accounts they lost connections to Exential Group and were still unable to withdraw their money.
Earlier in July, Finance Magnates reported on the multimillion-dollar Ponzi scheme when the UAE’s regulators ordered Exential Group in Dubai Media City to cease operations following scores of complaints by clients that due payments had dried up.
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Fresh scam adventure
Even as the court cases against him are being heard, the Exential boss circulated an email encouraging new investment in an “advisory service” called Pinnacle Asset & Investment Management, trading under the Exential banner, according to legal experts from Dubai-based Abdul Rahman Naseeb Advocates and Legal Consultants. The domain name of Pinnacle’s website is registered by Exential’s managing director himself and the mobile number listed on its trade licence is the same as that of Exential Mideast Commercial Brokers.
“We have raised the question of how he could legally set up and run another investment fund when he was apparently never licensed to do this in the first place, is under investigation for illegal trading by the DED and has judgements against him from the civil courts,” said a spokesman for Carlton Huxley.
Experts from Carlton Huxley added that they could bring criminal and/or civil action against the company in the British Virgin Islands and Australia. UK private detectives were in Dubai recently to interview victims and conduct a forensic audit into where the money has gone, and the legitimacy of those transactions.
Meanwhile, several investors have already submitted legal documents to Dubai courts appealing for a judgement that could increase their chances of recovering some of their cash. However, some of them have abandoned hope of recovering their balances as they can’t afford the legal fees that are expected to start at around $2,000.
A South African lawyer who invested in an Exential fund voiced his concern that the Exential boss could use the victims’ monies “to get out of his own legal situation. So many people have gone down the legal route with local law firms, a case should be strong enough.”
“Unfortunately, I am not in a position to spend months in court with no guarantee of recovering any money. I know how quickly legal fees can add up,” he added.