DUBAI: The man who disguised a $300 million (Dh1.1 billion) Ponzi scheme as a sophisticated foreign exchange trading programme to dupe thousands of investors in the UAE, is readying for yet another con job, an XPRESS investigation can reveal.
Dubai-based Indian Sydney Lemos, 36, is facing a string of court cases after his Exential Group left a trail of financial devastation and heartbreak in what is being billed as the most brazen scam to have hit the country in recent years. Exential’s 7,000-odd victims are mostly from aviation and oil and gas sectors. Each investor forked out a minimum of $25,000 per (Dh91,500) forex account after being promised annual profits of up to 120 per cent.
Buoyed by the incredible monthly returns, hundreds doubled and tripled their investments by taking huge bank loans.
Like any other outwardly viable but untenable model, the money-making scheme looked good till it lasted, which, in this case, was a little over five years. Everybody was happy while they were getting the promised money at the end of the month. But when the music stopped playing, investors hit the panic button.
Scores lodged complaints with the Dubai Economic Department (DED) which eventually shut down Exential’s Media City Office in July this year.
The total number of forex accounts held by Exential is estimated to be around 18,000. Multiple account holders include a senior executive at an oil and gas company who reportedly has 700 accounts of $25,000 each and a former vice-president of an aluminium company who has about 350.
Their entire life’s earnings stuck in a quagmire of deceit, many are now being hounded by banks and staring at an uncertain future.
“My life is ruined. I have become a psychological wreck since Exential stopped paying me,” said Filipina cabin crew R.S. who borrowed Dh150,000 to invest in the firm after hearing about it from colleagues.
An Arab businessman who dug into funds kept aside for his son’s college fee said he doesn’t know how he could make up for the shortfall while an Indian engineer claimed he needed the money back for a medical emergency. More horror stories abound on various online forums set up by investors to air their grievances.
New firm
Even as the court cases against him are being heard, the Exential boss is peddling dubious forex investments all over again.
This time he is using a company called Pinnacle Asset & Investment Management as a front to snare unsuspecting residents.
The domain name of Pinnacle’s website is registered by Exential’s managing director himself and the cellphone number listed on its trade licence is the same as that of Exential Mideast Commercial Brokers. To give the sham a semblance of credibility, renowned forex educator Mario Singh has been listed as the executive director on Pinnacle’s website – a claim denied by Singh.
“I am not on the board of directors of Pinnacle Asset and Investment Management LLC. The reason I am mentioned on their website is because I have been advising the company in the past,” Singh stated in an email statement to XPRESS from India.
“I have no association with the Exential Group. I have visited Dubai to promote myself and my academy, and not for or on behalf of the Exential Group,” said Singh, referring to an event hosted by him at a five-star hotel in Dubai some time ago.
Curiously, Pinnacle’s purported 42nd floor office in Dubai’s Emirates Towers belongs to Servcorp that sells serviced office space, virtual office products and IT services. “Pinnacle had a virtual desk, but that was several months ago. I don’t know where they are now,” said a staff when XPRESS visited the place recently.
Sydney Lemos, who is also the main sponsor of a football club in India, could not be contacted despite several attempts while emails sent to him remain unanswered even as a lawyer representing 45 investors of various nationalities said he’s hopeful of getting justice for his clients.
“We have filed several cases against Exential. The matter is under investigation and we are optimistic of the results,” said Hany Elsaid of Dubai-based Abdul Rahman Naseeb Advocates and Legal Consultants. Private detectives from UK
Nearly 250 other investors have hired private detectives from the UK to help to recover their funds from Exential’s parent company FCI Markets Ltd, based in the British Virgin Islands.
Experts from Carlton Huxley which specialises in fraud investigations were in Dubai recently to meet victims and chalk out a strategy.
Loosely modelled after the fraudulent MMA Forex exposed by XPRESS in 2013, Exential also ended up the same way.
“This is what typically happens with Ponzi-like investment schemes. They use the money of new investors to pay the earlier ones. But when the cycle of fund inflow gets disrupted, the whole thing falls apart,” said a financial analyst familiar with such cases.
Exential’s staff, however, said they had no inkling of the impending doom.
“Until last year business was roaring good. So much so that we would enrol up to a thousand clients every month. “At $25,000 per account that was a neat Dh25 million in the kitty. There were times when I could make up to Dh45,000 in monthly commissions on top of our Dh8,000 salary,” a former relationship manager said on conditions of anonymity.
Another staff said they were inundated with queries all day. “Around this time last year people would flock to our Arenco Tower office to invest money. Today, they hang around in the hope of getting it back.”
What our investigation found
The domain name of Pinnacle’s website is registered by Exential’s managing director himself and the cellphone numbers listed on its trade licence is the same as that of Exential Mideast Commercial Brokers and its sister concerns.
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