JEDDAH, 27 February 2007 — Authorities in the southern Asir region announced this week that 30 people have been investigated on suspicions of running investment scams.
Abdul Aziz Al-Kudairi, an undersecretary to the Asir regional government, said that the suspects are in different groups. Authorities say none of the suspects have the credentials they claimed to have when they approached investors with schemes, mostly in real estate development.
Local media reports are sketchy on the actual number of investors that are likely to serve jail time after investigations are completed. At least eight of the men are still under investigation and being sought. Four of the suspects have been arrested. An undisclosed number of them have been released on bail.
Some have agreed to pay back the money they embezzled from unwary investors in installments over time, but it’s unclear if they will be punished for committing the crime, or whether the victims of these crimes will get any financial compensation beyond eventually recouping their money.
One of the suspects, whose name was given only as Al-Farhan in local media reports, failed to meet his commitment to repay the money he defrauded from investors and was subsequently detained.
Al-Farhan was accused of investing millions of riyals in various projects and spending SR120 million on bribes and gifts-in-kind to lawyers and company operatives. The suspect allegedly used different identities when negotiating his schemes.
Another of the suspected fraudulent investors, Saleh Al-Bakri, allegedly attempted to flee Riyadh but was detained. He is being charged with taking investor money under false pretenses (including claiming to be a qualified investor) and losing SR130 million in the stock market. He is accused of spending investors’ money lavishly and speculatively in real estate.
Al-Bakri is also accused of using the money to invest in a failed attempt to start a TV channel. His brothers claim that they will be able to return the money to the defrauded investors after receiving financing from an undisclosed “international company”.
A third suspect, identified only as Al-Daar, is accused of blowing SR67 million in careless land speculation in Bahrain and SR44 million in various failed business ventures. He is being charged with paying some of the investors from the pool of capital he collected and claiming that the funds were profits, when, in fact, he was losing money.
Another suspect was named in the media as Sultan Al-Zahrani, who allegedly claimed to be an investor in the Jeddah Islamic Port, the second-largest port in the Middle East. He was arrested in the United Arab Emirates (UAE) after being tracked from Egypt to Lebanon.
Al-Zahrani claims he’s innocent and denies his involvement in the port scam. Media reports did not provide any information about the total amount of financial damage, nor how many people were tricked.
