UAE court acquits Asian broker in Dh10.5m sugar fraud case

Ras Al Khaimah: A 51-year-old Asian man has been acquitted by a Ras Al Khaimah court of fraud charges linked to a Dh10.5 million scam involving a fake sugar shipment and a fictitious bank financing deal.

The court ruled that there was insufficient evidence to prove he knew about the alleged fraud or deliberately helped carry it out. His lawyer successfully argued that he had acted only as a commercial broker between the parties.

In the same case, a 48-year-old European businessman was sentenced to one year in prison for defrauding a trading company through two transactions involving a purported sugar shipment and financing for a standby letter of credit (SBLC). He was also ordered to be deported from the UAE.

The businessman's company was separately fined Dh500,000 after the court found it had been used to conduct the transactions and receive the disputed funds.

The defendants faced charges of fraud, criminal participation and unlawfully obtaining money through deception. The company was also held liable for offences committed by its management in its name and for its account.

The case involved two transactions: the purchase of 12,500 tonnes of refined white sugar and a subsequent agreement to finance an SBLC.

According to court records, the first deal involved ICUMSA 45 refined white sugar, valued at $6.31 million, to be delivered from Abu Dhabi Port.

The European businessman presented documents and video footage allegedly showing the sugar cargo in storage and ready for delivery, convincing the buyer that the shipment existed.

The buyer transferred an advance payment of $1.2625 million, followed by another $600,000. However, the sugar was never delivered, and the money was not refunded.

In a second deal in May, the buyer agreed to contribute towards the cost of issuing an SBLC. Under the agreement, it transferred a further $1 million (Dh3.67 million) to the seller's company account.

The amount was supposed to be returned within 48 hours, along with an expected profit of $500,000, bringing the anticipated return to $1.5 million. However, no bank credit facility was opened, and the money was retained.

The court established that the two transactions involved a total of Dh10,505,375. It found that the businessman had used misleading documents, video footage and false representations to persuade the buyer to transfer the money.

He was convicted of fraud in both transactions and sentenced to one year in prison, followed by deportation. He was also ordered to pay the prescribed court fees.

His company was fined Dh500,000 after the court found that the deals had been conducted under its corporate identity and the disputed funds deposited into its bank accounts.

The Asian man was acquitted after his lawyer,Hanan Salem Al Shimili, challenged the prosecution's claim that he had knowingly participated in the fraud and shared the businessman's criminal intent.

Al Shimili argued that her client had acted solely as a commercial broker, introducing the buyer to the seller. He had no role in preparing contracts, handling payments or executing the transactions.

She told the court there was no evidence that he had received any of the disputed money or benefited financially from the deals.

The defence pointed out that the agreements required payments to be made directly into the seller company's bank accounts. One contract expressly prohibited payments to third parties, including brokers and the intermediary's business.

Bank records also showed that none of the money had been transferred to the broker or his company. Although he had been promised a 33 per cent share of the profits if the deals succeeded, he never received any commission.

Al Shimili said her client had relied on the cargo documents and video footage supplied by the seller, believing the shipment was genuine. He had neither inspected the cargo nor prepared the material shown to the buyer.

The defence also submitted correspondence showing that, after the deals collapsed, settlement negotiations took place directly between the buyer and the seller.

The businessman offered a $2.66 million settlement and provided a personal guarantee for the outstanding obligations. The lawyer argued that this showed the seller was independently handling the financial commitments, without the broker's involvement.

Another key point was an admission by the buyer's legal representative during Public Prosecution questioning. When asked about evidence linking the broker to the alleged fraud, the representative acknowledged that the claim of an agreement between the defendants was based on deductions rather than direct evidence.

Al Shimili argued that criminal liability could not rest on assumptions, particularly without proof that her client knew the sugar cargo did not exist or deliberately helped deceive the buyer.

She also questioned the police and prosecution investigations, saying they had failed to establish a financial link, prior agreement or independent evidence of collusion involving her client.

The court acquitted the Asian man after finding no evidence that he had received any of the disputed funds or entered into an agreement with the businessman to defraud the buyer.

It ruled that his role was limited to introducing the parties and passing information and documents provided by the seller, which he believed to be genuine.

The court stressed that introducing business partners, promoting a commercial deal or building trust between companies does not, in itself, constitute criminal involvement.

For an intermediary to be held criminally liable, prosecutors must prove that he knew about the fraud and deliberately assisted in carrying it out.

As there was no evidence that the Asian man had such knowledge or intent, the court acquitted him of all charges under Article 212 of the Criminal Procedure Law.

The ruling distinguished between the businessman who orchestrated the fraudulent transactions, the company through which the money was received and the broker, whose involvement in the crime could not be established.