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A serial fraudster took advantage of his reconciliation with his estranged sisters to operate a Ponzi scheme, in which he allegedly took more than BD382,000 from 19 victims, a court heard.
The Bahraini is standing trial at the High Criminal Court on charges of raising funds to manage and grow without acquiring an official licence, and stealing money through trickery.
Because his personal bank accounts were frozen, he allegedly used his sisters’ bank accounts to run the scheme, following a period of 16 years in which the family were not on speaking terms with him.
According to his alleged victims, the defendant would start his recruitment process by convincing them to invest using his personal account on an online trading platform, promising high returns.
The platform, which operates out of Mauritius, is specialised in foreign exchange trading and cryptocurrencies.
A few months after receiving the investments, the defendant would reportedly send handsome profits to the investors, but these earnings would eventually dry up and he would become unreachable.
Twelve alleged victims testified to the Public Prosecution about their experiences with the suspect, who has several fraud convictions on his criminal record.
“The defendant promised me 10 per cent monthly returns,” a Bahraini man, who claims to have been scammed, told the Public Prosecution. “He presented himself as a representative of the platform.
“I was referred to it by my colleague, who thought he earned profits on the platform. I reached out to the suspect, met him and opened an account.
“He asked me to transfer the funds to him via BenefitPay so the money could be used for trading. I sent around BD48,000 and would see supposed profits on the app, but I only got BD3,500 back before I lost access to my account and lost contact with the defendant.
“I later found out that the accounts I transferred my money to belonged to the man’s family, and that the profits were fake.
“I contacted the app’s support, who confirmed that my personal wallet didn’t have money in it, which made me certain that I fell victim to a scam operation.”
Another witness, who heard about the scheme from an accomplice of the suspect’s, also met the man and was promised 10pc in returns. He sent more than BD10,000 to him.
He signed an insurance contract with the defendant, which guaranteed that he would get his money back if it is lost on the platform. Although the wallet on the app was in his name, it was managed by the defendant.
“I got a total of BD1,000 in monthly profits, which convinced me of the legitimacy of the operation,” the witness said. “However, I later heard from acquaintances that it was a scam and that the man kept the money for himself.
“I heard he used methods of deception, like signing ineffective insurance contracts, showing the investors fake virtual wallets with earnings and making them believe that their money was being invested but, in reality, he kept the money for himself.”
Ten more witnesses recounted similar stories in prosecution interviews.
One of his sisters, whose bank accounts he used for the scheme, told authorities that she had no knowledge of what he was using them for, and that she just transferred funds following his instructions.
She stated that in 2023, he reconnected with the family through a family reconciliation initiative, after 16 years of estrangement. As part of rebuilding their relationship, she testified that he offered to help her manage her investments.
A detective stated that the man raised funds without acquiring a Central Bank of Bahrain (CBB) permit and that he had built an organised fraud scheme with the intention of swindling his targets.
A Ponzi scheme is a fraudulent investment scam, where returns are paid to earlier investors using the capital of new investors, rather than from profit earned. It relies on a constant influx of new money to continue, eventually collapsing when new investments dry up.
The trial was adjourned to December 15 for defence arguments.
zainab@gdnmedia.bh
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