A well-known businessman has been sentenced to eight years in prison and fined BD105,000 for embezzling more than BD6 million from investors.
The High Criminal Court yesterday ruled to confiscate his property and assets worth BD6,831,205, and ordered that he return BD6,831,707 as restitution to more than 350 victims who invested in his business empire.
The Bahraini defendant, who once had a good reputation and was known for his trustworthiness, was found guilty of forgery, money laundering and defrauding the investors.
Three of his company’s top officials – the chief executive officer and two board members – who allegedly aided him in the scheme were each sentenced to a year in prison and fined BD5,000.
The investment company, implicated in the case, is owned by the main suspect’s highly-successful parent company. All eight branches of the firm have now been placed under sequester, according to commercial registration (CR) portal Sijilat.
The probe was initiated following a tip from the National Centre for Financial Investigations, which suspected that the defendants had deceived individuals into investing in the company through fabricated and falsified business deals.
According to the Public Prosecution, the centre had received a financial report indicating that the owner had engaged in several suspicious activities.
He reportedly submitted dud cheques to the company’s accountants, withdrew funds from its accounts with no clear justification, and made payments that were not indicated in any written contracts.
“He used the name of several CRs 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, and carrying out transactions to lend them legitimacy.”
Prosecutors yesterday added that the three co-defendants had abetted him in these crimes by enabling him to ‘execute his criminal project’ through their specialised roles in his companies.
They accused the three of being aware of the scheme but failing to alert investors, thereby enabling the owner to pocket the funds.
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.
In a previous hearing, the defendants’ attorneys asked judges to appoint a new leading auditor to process evidence in the case, claiming that the previous audit was authored by a ‘biased’ individual with ‘interests’ contrary to those of the suspects.
The Public Prosecution representative objected as the defence asked for a do-over, stating that the auditor of the original report is reputable and prepared the document ‘with the utmost professionalism’.
Over the course of the trial, several witnesses were cross-examined by both sides, including a company manager, a CBB representative and police detective, a board member and a financial controller at the company.
An investor, who defended one of the suspects’ trustworthiness and honesty, also testified in the trial.
Three attorneys, representing the 352 victims earlier requested court documents so they can pursue civil litigation after the trial ends.
“The Public Prosecution continues to stand in the way of any and all crimes that attempt to harm Bahrain’s investment environment, or injure public trust in financial transactions,” yesterday’s statement read.
“Every possible legal measure will be taken to prevent such acts from being committed.”
zainab@gdnmedia.bh
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