Dubai court orders fraudster to repay Dh10 million in fake investment scam

A Dubai civil court has ordered a man previously convicted of fraud in an Arab country to repay more than Dh10 million to a fellow national, after finding that he had swindled the victim out of $2.7 million by luring him into a fictitious investment scheme.

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

According to court records, the defendant persuaded the victim that he was establishing a securities trading company in an Arab state, promising high financial returns in exchange for investment. Trusting these assurances, the victim transferred $2.7 million through a series of bank transactions, believing he was entering a legitimate business venture, Emarat Al Youm reported.

The plaintiff told the court that the defendant never returned the money and later absconded to the UAE. Subsequent investigations revealed that the company was neither licensed nor registered with the relevant capital markets authority and had no legal standing. The court found that the entity had been used as a front to deceive investors and unlawfully appropriate their funds.

Judges noted that the same facts had previously 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 stated that he had fled before serving his sentence or returning the stolen money.

During proceedings in Dubai, the defendant argued that local courts lacked jurisdiction, that the documents submitted were uncertified copies, and that the case should be dismissed due to the statute of limitations. The court rejected all three defences.

It ruled that the foreign criminal judgment was duly authenticated by the competent authorities in both countries, making it valid evidence under applicable international agreements. The judges also dismissed the jurisdictional challenge, noting that the purported company did not legally exist and was not authorised to receive or invest funds, meaning the defendant had collected the money in his personal capacity. Since he was present in the UAE, Dubai courts were competent to hear the case.

In assessing compensation, the judges ruled that financial harm extended beyond the stolen amount to include lost profits and the inability to use the funds for years. They added that moral damages, such as anxiety, emotional strain and fear of losing one’s rights, were also compensable. The court said it was entitled to award a lump sum without itemising each element of damage.

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