Abu Dhabi: Riyadh police have arrested a six-member gang for running fraudulent investment companies in the Saudi capital Riyadh and Jeddah, police said.
The gang, composed of five Syrians and a Yemeni resident, carried out 15 investment scams, defrauding unsuspecting people of 4 million Saudi riyals (Dh3.92 million), said Major Khaled Al Kreidis, assistant media spokesman for the Riyadh police.
Major Al Kreidis explained the gang members hosted the victims in luxury hotel suites, lured them by promises of quick and high returns and persuaded to invest lots of money. Afterwards, they did not receive their invested money as the fake brokers refused to pay the investmentsback and they blocked the client’s accounts. The gang then shut down the websites, but the police caught them before they escaped with the victims’ investments.
Major Al Kreidis said the gang digitally advertised and promoted their dubious, unlicensed and unregulated investment schemes.
They allegedly admitted to having defrauded unsuspecting investors. Seized in their possession were forgery tools and false insurance documents, police said.
The six men were referred to the Public Prosecution pending further investigation and trial, police said.
Saudi police have warned various kinds of investment and trading platforms offered include binary options, bonds, CFD (contracts for difference), commodities, goods and precious metals (such as crude oil, gold), cryptocurrencies, foreign currencies and exchange (forex), index/indices, mortgage, shares and stocks.
Such investment and trading platforms are promoted digitally via a domain name or URL, on social networks or text messaging service.
Behind these advertisements there are often dubious investment and trading companies (lacking the required licenses), bogus stock brokers or similar players and actors. However, online advertisements and websites often look legitimate and are set up to look legitimate and professional.
Cold-calling tactics
These criminals also use cold-calling tactics to lure investors and victims by pressuring them into opening an account.
Moreover, such investment and trading opportunities are often either worthless or non-existent. Sometimes legitimate-seeming certificates and other documents are fabricated to trick clients into investing with these illegal entities.
By receiving cold calls and reading the online advertisements, consumers and investors are lured with the promise of quick gains and high rates of return with
low risk.
On such websites, investors can open trading accounts and start depositing money directly via card payments or wire transfers. Once an account has been opened, investors are then put into contact with perpetrators (by phone or email) who claim to be official brokers or personal account/ finance/portfolio managers for an array of different online investment exchanges, and trading platforms or websites.
On the investor’s online account, virtually-announced quick gains are usually shown to the client, however these gains are usually not real. The website is manipulated to make it look like these gains were actually attained.
Contact with investors is established and maintained by perpetrators who set up and operate out of fake call centres. Perpetrators are usually competent and knowledgeable in what they’re trying to sell, and they succeed by gaining the trust of the investors by keeping in touch regularly and promising more gains.
The victims are then persuaded and pressured into investing even more of their money over time in several lump sum payments.
Once the investors wish to withdraw their money from their accounts, in some cases the perpetrators will make excuses to not give them access to their money.
As soon as the victims start making inquiries and realize that they aren’t able to access their funds, the perpetrators then become unreachable and disappear. Following their disappearance, the website often shuts down and investments are lost.
