A SERIAL fraudster, who ran a bogus cryptocurrency trading platform, was found guilty of taking more than BD382,000 from investors by operating a Ponzi scheme.
The High Criminal Court ruled to sentence the Bahraini man to five years in prison, fined him BD100,000, and ordered him to return the investors’ money.
The court also ruled to confiscate the profits generated from the scheme and granted a request from victims to allow them to pursue damages against the scammer in Civil Court.
The 42-year-old was found guilty on charges of raising funds for investment without obtaining an official licence and stealing money from 19 victims.
In an attempt to appear credible, he officially registered two companies in the UK, promising high returns to his victims and convincing them that the investments were perfectly safe.
He also named the companies after a legitimate online investment platform, claiming that he owned and operated the foreign exchange and cryptocurrencies trading service.
Twelve people testified to the Public Prosecution about their experiences with the suspect, who has several fraud convictions on his criminal record.
When the investment first begins, the defendant would usually send handsome profits to the investors, but these earnings would eventually dry up and he would become unreachable.
One of the victims, a Bahraini man, told the prosecution that the defendant promised him 10 per cent in monthly returns. He said he sent around BD48,000 and would see supposed profits on the app, but only got BD3,500 back before he lost access to his account and contact with the defendant.
Another witness, who heard about the scheme from an accomplice of the suspect, also met the man and was promised 10pc in returns. He sent more than BD10,000 to him.
He also signed an ‘insurance contract’ with the defendant, which guaranteed that he would get his money back if it was lost on the platform. He started receiving BD1,000 in monthly profits, but that dried up too.
“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,” the victim said.
Ten more witnesses recounted similar stories during prosecution interviews.
A detective testified 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.
The unscrupulous fraudster not only scammed strangers, but took advantage of a reconciliation with his estranged sisters – after 16 years of no contact – to orchestrate the scam.
Since his personal bank accounts were frozen due to earlier lawsuits, he used his sisters’ accounts to run the scheme after the family had severed ties with him for an extended period of time.
One of his sisters stated that they reconnected through a family reconciliation initiative, and said he offered to help her manage her investments as part of rebuilding their relationship.
She told authorities that she had no knowledge of what he was using her bank accounts for, and that she just transferred funds at his request and followed his instructions without questioning him.
At a previous hearing, a lawyer representing the 12 victims told judges that they intend to file a class action lawsuit against the defendant in Civil Court.
READ MORE:
McLaren’s world champion Lando Norris enjoys a round of golf in Bahrain
New mosque opens in Muharraq City
REEV technology-powered iCAUR models make debut
LuLu launches Ramadan drive with price-lock deals
King receives Royal Family members on Charter anniversary
&uuid=(email))