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Expose: Trading scam masterminds unmasked in the UAE

Year-long XPRESS investigation blows the lid off organised crime networks responsible for 150-odd trading scams that have wiped out nearly one billion dirhams from the market since 2015 and destroyed hundreds of lives in the UAE

Image Credit: XPRESS
XPRESS

It took us almost a year to get to the bottom of it.

The painstaking investigation involved sifting through hundreds of documents, speaking to dozens of confidential informants besides innumerable tails and stakeouts, often in the dead of night.

As the final pieces of the puzzle fall into place, the picture that emerges is deeply disturbing.

XPRESS can now reveal that a network of organised criminals is behind the 150-odd brazen trading scams that have hit the UAE since 2015, wiping out nearly one billion dirhams from the market and destroying thousands of lives in the process.

Terrible Three

Our investigations show that the scams — now an endemic spreading like cancer — are largely the handiwork of just three gangs.

They are led by longtime UAE residents who stay in the shadows, perfecting the game, building smuggling and distribution networks through China, India, Pakistan, Iraq and the Far East, without leaving so much as a fingerprint.

Even the people working with them don’t know the scale of their operations.

It’s a parallel industry that’s more lucrative than drug trafficking, and the three gangs run it like well-oiled machinery.

Secure in the belief that the law will never catch up with them, their criminal activities have assumed frighteningly grotesque proportions.

Even as you read this, they are planning to pull out at least 10 mega scams.

But now we have not just identified the masterminds of these gangs, we also have an exhaustive record of their criminal history along with minute personal details of all their key accomplices — in some cases — down to what cars they drive, where they dine and who they date.

We are disclosing everything here except pictures of individuals and their names because of legal constraints.

Meet the men behind the trading scams

Bespectacled, balding and mostly dressed in safari suits, father of three D.R. looks anything like a criminal, much less the wily thug who has pulled off several audacious trading scams worldwide. At least four were in the UAE. The most recent was in February 2016 when he duped 40 UAE businessmen of Dh35 million through the phoney S.R. Global Trading which operated from the UBL Building on Bank Street, Bur Dubai.

D.R., originally from Hyderabad, lives near the Gold Souq in Deira with his Russian wife, and is often spotted driving her to fancy restaurants in his 7 series silver BMW sedan.

Here is the scam timeline of the man who has been living in Dubai for nearly 25 years and has 14 cases registered against him at Al Raffa Police Station by S.R. Global’ victims.

2004: Opens Christy Fashion garment store in Bur Dubai and cheats several traders by giving them dud cheques against purchases worth thousands of dirhams.

2005: Uses same modus operandi to dupe scores in Abu Dhabi through another bogus firm Afroon Trading.

2006-2010: Carries out a string of trading scams in Singapore and Hong Kong

2011: Surfaces in China where he dupes local suppliers out of Dh5.5 million in Yiwu City in Zhejhang province by acting as purchase officer for Euro Global Trading International Limited set up by him with the help of an Indian and Yemeni. However before he can flee, traders get whiff of the scam and kidnap him. D.R. remains in their custody for 17 days before the Indian embassy in Beijing intervenes and secures his release.

2015: Returns to favourite hunting ground Dubai and props up S.R Global Trading, but like many times in the past, remains behind the curtains. On paper, the company is owned by an Indian Rasheed Odakkal, and D.R. is just a sales staff. But it’s he who calls the shots and make all the purchases — in this case electronic items, cameras, perfumes, vegetable oil, iPhones, construction material worth Dh35 million.

A little extra: In the wake of D.R.’s detention and subsequent torture by Chinese traders in 2011, the Indian embassy in China issued an advisory warning Indian traders not to do business in Yiwu. Alas, they didn’t know!

Fond of expensive watches, E.P.J. heads a close-knit gang of 20 but his most trusted aide is Bangladeshi S.B. who lives with his two wives and three kids in Ajman.

Between them, the duo have executed six of the UAE’s biggest trading scams, including two in the last few days.

Traders are still counting their losses after Bright Way Technical Services in DIP and Black Star Electronics in Deira, shut shop. ESSM Power Control Switch Gears, alone lost Dh1 million.

Another firm that delivered steel plates last week lost Dh350,000. Even cafeterias were not spared. One such eatery was issued a dud cheque for supplying biryani to Black Star staff during their stay in Dubai.

Dummies

The gang struck around this time last year too. Around 70 traders were hit when Explore Fareast Marine jointly owned by a Singaporean and an Indian closed their Al Khaleej Centre office in Bur Dubai and disappeared.

As it turns out they were dummies.

Bright Way, Black Star and Explore were all the brainchild of E.P.J. and S.B. who flew in around 35 men and women on visit visas, gave them fake business cards and sent them into the market as purchase officers.

The impersonators bought everything from home appliances and foodstuffs to construction material and electrical coils against post-paid cheques which eventually bounced.

The goods, estimated to be worth Dh30 million were sold dirt cheap to third parties for cash.

E.P.J., who runs a facilities management firm, has an extravagant lifestyle and often travels to exotic destinations with his wife and five-year-old daughter. Key gang members are also taken along as a reward for their services.

Nobody has to pay anything as all flights and hotels are pre-booked through ususpecting tour agencies.

A little extra: E.P.J. drives a Lexus and BWM with nearly identical numbers. The gang’s key lieutenants are:

1. M.A. Runs computer shop in Bur Dubai, in charge of selling of electronic items, hosting websites for bogus firms

2. S.B. Lives in Al Nahda, handles purchase and selling of generators, switchgears, solar panels

3. Z.S. Pakistan-based woman, acts as purchase staff

4. Anna: Receptionist/incharge supermarket purchases

5. F.M: Comes on visit, specialises in building material

Overview of E.P.J. and S.B.’s crime sheet

2012: Crystal City Building Material, Al Quoz. Haul: Dh3 million

2013: SunLink Marine near Wafi City and Jabal Al Noor in Al Ghusais. Combined haul: Dh6 million.

2014: Steelite Electrical and Mechancial Engineering, Al Ghusais. Haul: Dh5 million

2015: Alpha Impex GT, Deira (figures not available)

2016: Explore Fareast Marine, Bur Dubai. Haul: Dh30 million

2017: Bright Way Technical Services in DIP and Black Star Electronics in Deira. Haul: Yet to estimated

 

Dad of three, M.B. has had several brushes with the law. He has been arrested several times, but is yet to mend his ways. After falling out with his UAE-based brothers over a bitter business dispute, M.B. stumbled into the world of crime and has not looked back since.

The Hor Al Anz based Indian resident recruits criminals to carry out trading scams through an office supplies company run by his wife.

The ill-gotten goods are sold through his accomplices H.A. and G.H. to a shop located near a hypermarket in Karama. Some goods also end up in a shop near Al Fahidi Metro Station.

It is run by a woman whose husband is in jail. M.B. drives a BMW sedan registered in the name of a firm that deals in computers and office equipment and is located on Khalid Bin Walid Street.

List of bogus trading firms established by M.B. between March 2016-August 2016 to scam traders:

MARCH 2016: Royal General Trading in Deira. Haul: 2 million

APRIL 2016: Brazza General Trading, Deira: 1 million

MAY 2016: Lifeline Surgical Trading, Ajman: 3 million

AUGUST 2016: Salim Electrical Devices (SED), Sharjah: 1 million:

A little extra: MUB was arrested by Dubai Police in November 2016. It’s not clear whether he is still in prison


If these three thugs are behind the recurring scams then the corollary question is: Why aren’t they behind bars?

The answer is simple. They don’t leave behind any direct evidence which could be held against them.

Remember, these are no ordinary criminals but seasoned serial swindlers who have mastered the art of deceit to perfection. They know every loophole in the law and exploit it to the hilt.

For starters, they never put their names on the trade licenses of the trading companies they help set up.

Their owners and signatories are mostly handpicked dummies. In one case (Sunlink Marine, 2013) it was a mason, in another (Salim Electrical Devices, 2016) it was a driver and in a third, (Steelite Electrical, 2014) an Indian man who had never travelled to the UAE. How his identity was stolen and used is a mystery.

People who lend their names and documents do it willingly in return for money. (A driver who was made the CEO of one such firm claims he got Dh5,000 to play along the charade).

These frontmen are flown out of the country before the scam comes to light as are those who are brought to the country on visit visas and given fake business cards.

Sure enough, instead of somebody to prosecute what’s left with the police after each scam are stacks of dud cheques.

How many times have these gangs struck in the UAE since last year and what were the estimated losses?

Nearly 50 times. Prominent runaway trading firms include Barnabio (Dh10 million), Reliancee (Dh 5million), Explore (Dh15 million), Al Shikha (Dh2 million), Priyanka G.T (Dh1 million) Connex Dh3 million), S.R Global (Dh15 million) Van Der Heide (Dh2 million) Trade Key (Dh2 million) Midwest General Trading (Dh3 million), LMI (Dh500,000), Dyna Trade (Dh400,000) and Bright Way (amount yet to be tabulated).

How many traders have been hit by these scams in the past three years?

Exact figures are hard to come by, but the numbers could be any where between 3,000 and 4,000. In many business neighbourhoods, nearly one out of every four trader we spoke to had been victim of the scam with many losing more than two million dirhams individually.

What do the bogus companies buy from unsuspecting traders?

Anything they can get their hands on, but their top favourites are building material, electronics, stationery items, food stuff, home appliances, industrial equipment, hotel stays and international flight tickets. There have been also instances of conmen buying 2,000 goats, hundreds of Ferrari World Tickets, 10,000 fire extinguishers and 60,000 gallons of diesel.

Where are the stolen goods stored?

In rented warehouses. Most of them are in Ajman and Sharjah but there are a few in Dubai too.

Are any of these companies preparing to run away after scamming traders in the next few weeks?

At least 10, including B.E, R.A, I.G, H.I.M., T.G, D.E.E, A.A.D and S.R.H.E The full names of these trading firms have been withheld for legal reasons.

Could there be a FOURTH gang?

Until 2010, there was just one gang. It was led by D.R. and his second-in-command S.S.A, also from India. With nobody to challenge their hegemony, they reigned supreme.

However D.R’s. luck ran out when he was caught in China in 2011 and charged with not paying traders their dues. As he remained stuck overseas for a year and a half, M.B. and the duo of E.P.J. and S.B. emerged on the UAE scene and quickly spread their tentacles. By the time D.R. returned to Dubai, the competition had grown exponentially with three gangs vying for a piece of the pie.

But now the extremely lucrative trading scams have spawned a tangled network of several splinter groups. One of these is led by a Yemeni and another by S.B. who was once key member of EPJ’s team.

While these breakaway groups don’t yet have the wherewithal to pull off a multi-million dirham scam, they are fast strengthening their foothold in the country. S.B, for instance, has already found an ‘investor’ to set up a dodgy heavy equipment trading firm in Ajman.


 

What else did our investigation uncover...

Companies whose names are given as credit references are part of the criminal network.

The logo of Expo 2020 Dubai is routinely misused on websites and brochures to get credibility.

Conmen deposit large amounts into the bank accounts of trading firms so that they can produce a healthy bank statement should you ask for it.

 

The audit reports submitted by them are either false or incorrect. In a recent case it was almost identical to the audit report submitted by another fraudulent firm last year.

Since traders are wary of dealing with new companies, the gangs often take over the management of existing firms and use their credibility to scam traders.

At least one travel agency is invariably hit in each scam. In one instance, conmen booked around 50 rooms at a five-star hotel in Garhoud besides hundreds of flights originating from USA, Sri Lanka, India and Pakistan.

The spate of scams has changed the rule of business in the UAE. Panic-stricken traders are reluctant to strike deals with new firms. Many have also withdrawn credit facilities to existing clients.

The stolen goods are either shipped out of the UAE or resold in the local market by people known as ‘cutters’ in gang parlance.

All masterminds run legitimate businesses in the UAE to avoid suspicion.

How to spot a fraudulent trading firm

Beware of companies that send random purchase queries via email.

Don’t get impressed by fancy websites and glowing testimonials. The website could be a cut or copy-and-paste job and the testimonials and credit references could be fake.

Call for stricter rules

The spate of scams has intensified calls for stricter rules. Traders said their main grouse is that the police treats these as bounced cheque cases instead of organised crime. Many are also demanding a law to prevent establishments from buying stolen goods.

XPRESS to the rescue

Scores of traders routinely contact XPRESS before dealing with a firm. Your tip-offs saved many from falling for the scam.

Without you, this wouldn't have been possible

This expose wouldn’t have been possible without the support of victims who shared their stories with us and provided us with clues which eventually helped us zero in on the three masterminds and their accomplices.

Besides research volunteers and an IT expert, we are also indebted to all those anyonmous tipsters who supplied a plethora of information, and to our staff and interns who sifted through piles of documents during the investigation. Here’s a big thank you to each one of you. — Editor

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