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The Dubai authorities have arrested on criminal allegations Sydney Lemos, the man behind Exential, a forex brokerage that was involved in fraud scandal last year, local online news media The National reported earlier this week, citing data from fraud investigators. He is accused in partaking in a forex fraud scheme worth AED 50 million, or some $13.6 million.
Lemos is from India and was the chief executive of Exential. He was arrested on 21 December, 2016. He tried to launch a new scheme under the Exential banner, offering via e-mail potential clients to invest in an “advisory service”.
“We have raised the question of how he could legally set up and run another investment fund when he was apparently never licensed to do this in the first place, is under investigation for illegal trading by the DED and has judgments against him from the civil courts,” the media cited a spokesman for Carlton Huxley, a private UK consulting and financial fraud investigation firm that is working on recovering investor funds.
Under the forex scheme, the brokerage promised clients to double their funds on a $25,000 (AED 91,800) investment in forex, but failed to pay them. It has tricked investors not only from Dubai, but also such based in Nigeria and the Philippines, based on the complaints traders have filed against the broker. The company claimed that client withdrawal delays were related to anti-money laundering and compliance investigations in Australia.
“We are working with various authorities both inside and outside Dubai, and looking at the alleged laundering of more than Dh50m by one individual,” said Carlton Huxley’s spokesman.
“We are working with the authorities in Australia and British Virgin Islands and will be reporting our findings to Dubai CID,” added John Rynne, a Carlton Huxley director and former senior officer with the Metropolitan Police in London.
Investors are concerned that they may not get their money back if criminal charges are brought against Lemos, according to The National. The majority of the traders who trusted their money with the broker were cabin crew and airline personnel in the Middle East.
Exential is based in the tax-free zone Dubai Media City. It offers managed forex trading services. The Department of Economic Development (DED) of Dubai ordered the company in mid-2016 to cease trading operations while an investigation is in place. However, the broker’s website seems to be working as usual. However, it reports no monthly returns for the period since July 2016.