Ponzi scheme victims in UAE hope to recover their investments
Victims of the scammers formed group a group to recover the money the lost in the Ponzi-like scheme.
A group of Filipino expats are hoping to recover the money they lost in the Ponzi-like scheme, Exential Group. They recently formed a group called Pinoy EG Group and sought legal assistance from the Philippine Consulate in Dubai.
They are also calling on other kababayans (compatriots) who fell prey to the fraudulent scheme to join the group and file claims.
Dubai resident Rexie Albon Tan, 52, who formed the Pinoy EG Group back in August 2019, said she lost $242,000 (Dh885,000). The ringleaders of the $200 million Ponzi scam, Exential's CEO Sydney Lemos and Ryan Fernandez, were sentenced by a Dubai court 500 years in prison or one year each for the more than 500 criminal cases filed against them.
The Exential Group was shut down by authorities in July 2016. However, it remained a big challenge for the almost 7,000 UAE residents of various nationalities who invested in the get-rich-quick investment scheme to recover their money.
Tan said she took out a loan of Dh225,000 back in August 2014 and invested it in Exential Group. After getting a "hefty interest", she topped up her loan, resigned from her job and invested more money. She even asked some friends and acquaintances to invest in Exential Group.
Investors were asked to deposit at least $25,000 to open an account with Exential Group. The money was said to have been used in foreign exchange trading and profits of up to 120 per cent were promised. In reality, however, there were no actual profits gained from trading as any profits that were paid out were from the deposits of investors who came late into the game. Early investors who made substantial profits were then encouraged to invite friends, family and colleagues to sign up and many of the victims themselves have referred someone.
"The scheme was built on the premise to encourage your friends, family, colleagues and basically anyone to invest," said lawyer Barney Almazar, a veteran financial and legal adviser who is also a director of corporate-commercial department of Gulf Law in the Middle East and Philippines.
Some Filipinos were enticed by the promise of 'hefty returns' and took out loans.
"The interest from the bank can easily be covered by the profit we were supposed to gain from investing in the Exential Group," YC told Khaleej Times. "I took out a huge loan, lost my investment and I'm now paying the banks," he added.
Another Filipino expat, Dan, who opened two accounts eventually convinced his brother to open his own account. His brother lost $25,000, money that could have been used in treating his cancer, which he contracted a year ago.
Meanwhile, a lawyer from Sara Advocates and Legal Consultants, the legal firm retained by the Philippine Consulate, said they will pursue the case and help the victims recover their money. Members of the Pinoy EG Group said it was in their best interest that they formed the group as they can pool resources to pay for any expenses they will incur in pursuing their legal claims.
Criminal intent must be established: Lawyer
Barney Almazar, director of corporate-commercial department of Gulf Law in the Middle East and Philippines, said criminal intent must be established first before a person can be prosecuted.
It must be established first if they (Exential Group investors) are entitled to refund based on the contract. Exential Group is obliged to return investment 20 days (or whatever notice period) from their notification of their intent to withdraw their investment.
Almazar explained: "If they have not sent termination or withdrawal notice, obligation to return is not yet present. But if they have terminated and Exential did not refund within the agreed period, they should send a formal demand for the payment of principal and interests."
The next step is to file a collection case at the court and the claimant has to pay a filing fee of about seven per cent of the claim (the maximum filing fee is Dh30,000).
"There is actually no need for lawyer. They can file personally. All documents and evidence must be translated to Arabic. These include investment contract, termination notice, demand letter and other supporting documents," Almazar added.
"Once there is judgment, they can file for execution. But since Exential Group office is closed and it is likely no one will appear in the court, the court will order publication of their notice against Exential Group."
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