On Monday, 54, mostly emirati, men appeared at the Abu Dhabi court of misdemeanours, charged with fraud and money laundering, according to reports in UAE’s The National.
The men are accused of conning almost two thousand investors in a scam disguised as a car trading business.
The scheme encouraged customers to invest money to buy cars then resell them for a substantial profit, according to local media reports.
All of those accused have pleaded not guilty, with 47 alleged perpetrators granted bail.
However, the three masterminds behind the investment fraud and an individual referred to as an “agent” remain in police custody, reported the publication.
All four have also denied the charges, with one reportedly saying: “I did not steal people’s money, I simply bought their cars, and I have a commercial license to buy and sell cars.”
Requests to be released on bail were denied which lead to protests from the agent: “I should be bailed out like the rest of the defendants, why am I in jail?”
Ponzi-style car scam
Police began their investigations into the scam over a year ago after receiving hundreds of complaints from investors, which lead to the discovery of a huge money laundering operation set up by the defendents.
Last month, Abu Dhabi attorney general, Ali Al Balushi, confirmed that to date it has recieved 1,909 complaints over the scam. Financial claims filed by the victims are reported to be as high as Dh2.3bn.
Prosecutor Hassan Al Hammadi said that the scheme worked in two parts. The men would buy second-hand cars using post-dated cheques. They would then sell them to other victims but not deliver them.
The money from the sale would be used to pay back previous investors.
The scheme was then advertised as a range of four investment funds, using a car showroom and promising returns of between 70%-100%, which never materialised.
Police have so far seized Dh160m from the defendants including 395 cars. Prosecutors have also begun the process to sell the confiscated cars, which are expected to bring more than Dh52m at auction. The proceeds of the sale will be towards the case.
The case has been adjourned until August 7.
