Court Orders Fraudster to Repay Dh10M in Sham Investment Case

A Dubai civil court has ordered a man, previously convicted of fraud in another Arab country, to repay more than Dh10 million to a fellow national after finding that he cheated the claimant of $2.7 million through a fake investment scheme.

 

The court also awarded Dh500,000 in compensation for material and moral damages, ruling that the defendant had deliberately deceived the claimant into investing in a non-existent company before fleeing his home country.

 

Court records show that the defendant convinced the victim he was setting up a securities trading company in an Arab state, promising high returns on the investment. Relying on these assurances, the claimant transferred $2.7 million through multiple bank transactions, believing he was entering a legitimate business venture.

 

The plaintiff told the court that the money was never returned and that the defendant later absconded to the UAE. Investigations revealed that the purported company was neither licensed nor registered with the relevant capital markets authority and had no legal standing. Judges found that the entity was used as a façade to mislead investors and unlawfully obtain their funds.

 

The court noted that the same facts had earlier been examined by criminal courts in the defendant’s home country, where he was sentenced in absentia to 15 years in prison and fined after being found guilty of defrauding the claimant and others. The ruling said he fled before serving his sentence or repaying the stolen money.

 

During the Dubai proceedings, the defendant argued that local courts lacked jurisdiction, that the documents filed were uncertified, and that the claim was time-barred. The court rejected all three arguments.

 

It held that the foreign criminal judgment had been properly authenticated by the competent authorities in both countries, making it valid evidence under applicable international agreements. The judges also dismissed the jurisdiction challenge, noting that the alleged company did not legally exist or have authority to receive investments, meaning the defendant had taken the funds in his personal capacity. As he was present in the UAE, Dubai courts were competent to hear the case.

 

On compensation, the court ruled that the financial damage was not limited to the stolen amount but also included lost profits and the claimant’s inability to use the funds for years. Moral damages, including anxiety, emotional distress and fear of losing legal rights, were also held to be compensable. The judges said they were entitled to award a lump sum without itemising each head of damage.

 

The defendant was ordered to repay the $2.7 million, or its equivalent in UAE dirham, pay Dh500,000 in damages, and settle annual legal interest of 5 per cent from the date the judgment becomes final until full payment. He was also directed to bear court fees, expenses and legal costs.

 

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