UAE residents warned against financial frauds

UAE residents warned against financial frauds

The warning followed an ongoing trial of 51 men accused of defrauding nearly 2,000 people of Dh800million


Ismail Sebugwaawo

Published: Tue 25 Jul 2017, 3:47 PM

Last updated: Wed 26 Jul 2017, 9:48 AM

The Abu Dhabi Judicial Department has warned residents against investing in financial portfolios that are not licensed by authorities or falling victims to fraudsters.
The judicial officials also highlighted about the dangers of these portfolios, and how they negatively impact employment, society and the national economy.
The warning followed an ongoing trial of 51 men at the Abu Dhabi Misdemeanour Court accused of defrauding nearly 2,000 people out of Dh800 million in a car investment scam.
Investigations into the case, which is one of the biggest scams in Abu Dhabi during the recent years, showed that an Emirati main defendant in the case and his gang lured customers to buy cars from them and later they would encourage them to sell the cars through them at a higher price by offering them big profits.
Prosecutors said the fraudsters promised the investors a 100 per cent return on their money, before this changed to between 70 and 80 per cent. The accused allegedly issued post-dated cheques to the investors. Those people who joined and invested first received the promised profit, which encouraged others to join the scheme that went on for a few years, according to authorities.
UAE car scam gang cheats nearly 2,000 people of Dh800m
And during the Judicial Department's "Our Councils" lecture held in Al Ain on Monday, authorities said some people could be excited about getting quick and huge profits and hurry to invest their money in businesses brought to them by certain people without even first verifying on whether the investment is a licensed one or genuine.
Rashid Ateeq Al Dhahiri, head of Al Ain Public Prosecution said, "Despite several awareness messages about gangs that lure people into investing in bogus and non-licensed businesses by promising them huge profits, some residents are still falling victims to these scams."
"Many people have lost millions of dirhams including money they borrow from banks because they are attracted to invest in fake and unlawful deals. People need to be very careful about certain investments, especially those involving getting huge profits in a short period of time."
He added: "It's good to first investigate the people involved in an investment and also verify whether is lawful and licensed by authorities before giving in your money."
Al Dhahiri also explained the negative effects of fake investments to both the society and the nation's economy saying that besides people losing a lot of money through the bogus deals, fraudsters damage the country's image which negatively affects the investment environment as some people might become hesitant to do certain businesses or partner with people as they fear getting cheated.
Officials said bogus funds are also a threat to the nation's economy and security because the money collected could be used for illegal activities.
Some of the main reasons as to why people fall victims to fraudsters according to Al Dhahiri, are ignorance as some people are not aware of fraudsters, and also greed as certain residents want to make quick profits.
Officials have urged people to avoid involving themselves in unlicensed investments to avoid getting troubles.
According to the Federal Law, practicing any economic activity before obtaining a licence is punishable by imprisonment of not less than three months or a fine of not less than Dh40,000.
Financial fraud can result to imprisonment for a period of up to 10 years or a fine of up to Dh100,000.

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