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Appeal judges upheld the eight-year prison sentence of a well-known businessman, who has embezzled more than BD6,000,000 from 352 investors, in a ruling yesterday.
In December, the Bahraini appellant – who once had a great reputation and was seen as trustworthy – was found guilty of forgery, money laundering, and defrauding people who put funds into his investment platform. He was ordered to pay fines and restitution totalling nearly BD14 million.
The Supreme Criminal Appeals Court spared his co-appellants, the investment company’s chief executive and two board members, of a one-year prison sentence.
Overturning the jail time, the court ruled that the Bahraini corporate officials will serve the alternative penalty of community service, but upheld a BD5,000 fine.
Meanwhile, judges rejected the Public Prosecution’s appeal to impose an extra fine of BD320,000 on the three accomplices, to be paid jointly by the three men.
The court ruled to jointly charge all four appellants BD813 to pay the accountant who carried out an updated audit for the appeals case.
Financial penalties issued against the main defendant were upheld by the court: the confiscation of BD6,831,205 from his property and assets, and ordering him to BD6,831,707 as restitution to the victims.
“The suit against the main appellant satisfies all legal conditions to convict him,” read yesterday’s appeals verdict, citing the evidence that the first instance court used to arrive at his guilt.
“The ruling was based on witness statements, the appellant’s admission of guilt, an audit report, a financial analysis, the opinion of a forgery expert, and cheques that were seized.”
During the proceedings, prosecutors reasoned that the extra fine was to compensate for the corporate officials’ participation in the embezzlement, particularly in the last two investment deals, worth BD320,000.
In an earlier statement, the Public Prosecution called the High Criminal Court’s decision to fine the main defendant, but not the other convicts, “an erroneous application of the law.”
However, this was soundly rejected by appeals judges, who explained that the prosecution’s request was not valid.
“The three men were accused of aiding and abetting the main defendant, but the act is only punished if it came before or during the execution of the crime,” the new ruling read.
“In order for them to have aided him in embezzlement, which incurs the fine that the Public Prosecution requested, the money had to have entered the possession of the individual they were aiding.
“The money from the last two investment deals never entered his possession, but rather entered the company’s bank account, and he did not take it for himself.
“Since the main perpetrator, who the three accomplices have been accused of aiding, did not have the money himself, then there was no way that they could have colluded with him to take it.
“The money was indeed used for a purpose other than it was officially meant for – they used it to make investment payouts to previous investors.”
The GDN earlier reported that the investment company, implicated in the case, is owned by the main suspect’s highly-successful parent company.
A tip from National Centre for Financial Investigations sparked the investigation, stating that the suspects tricked individuals into investing in the company through bogus, falsified business deals.
The centre had received a financial report indicating that the owner took a number of suspicious actions, like submitting dud cheques to the company’s accountants, withdrawing funds from its accounts with no clear justification, and making payments that were not indicated in any written contracts.
He reportedly used several registered companies as a pretence, falsely claiming that their owners needed funding to grow their ventures, then presented them as investment opportunities to his targets.
“When the investors agreed to finance the businesses, he swindled the money they put in, using the funds to his own advantage, carrying out transactions to lend them legitimacy,” read an earlier statement.
Prosecutors earlier stated that the three co-defendants had abetted him in these crimes by enabling him to ‘execute his criminal project’ through their various specialised roles in his companies.
They accused the three of knowing of the scheme but did not alerting investors, thereby allowing the owner to pocket the money.
The Central Bank of Bahrain audit stated that the defendant authored and signed the cheques, and addressed them to his name. He used the embezzled money to pay off debts and loans, the court heard.
The businessman’s assets were frozen, and the prosecution appointed a manager to administrate his holdings. A travel ban was also placed to forbid him from leaving the country.
Three attorneys, representing the 352 victims earlier requested court documents, so they can pursue civil litigation after the trial ends.
zainab@gdnmedia.bh
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