Case study: Investor group swindled by outside partner with alleged friends in high places

Bilks Group for More Than $6 Million

In the high-stakes world of investing, not everything is as it appears to be. Handshake agreements built solely on trust are a thing of the past, as fraudsters take on complex identities and utilize far-fetched (but very believable) schemes to boldly fleece seemingly intelligent and highly educated victims. This case study is a prime example of what happens when parties focus too much on trust and dollar signs, and not enough on the outside sources that are promising those dollars.
CRI Group was contacted by a prominent investor group from the U.S. that claimed it had been defrauded of more than six million dollars by an outside business partner with whom the group had established what appeared to be a solid and trusting relationship.
The scenario unfolded over 18 months, a period in which the subject, Mr. Alex Jones (not his real name) was introduced to an influential investor group in San Francisco and became very close to its members, slowly and steadily earning their trust and eventually siphoning their dollars.
When the group first met Mr. Jones, he passed himself off as a global investment professional with impeccable credentials who worked out of Dubai and whose close contacts included the brother-in-law of Mohammed bin Rashid Al Maktoum, the Prime Minister and Vice President of the United Arab Emirates.
While distracting the group with an impressive-looking website that showcased his various accomplishments and capabilities, Mr. Jones proceeded to describe in detail the joint venture he had formed with Shiekh Mohammed’s brother-in-law which offered investors lucrative lines of credit that would be backed by the group’s various investments in global gold mines, fine artwork, precious metals and other valuable assets.
Mr. Jones wooed the investor group with promises of high returns on their dollars, which would be invested virtually risk-free, enjoying the security that only comes through an exclusive business affiliation with “His Highness.”
Apparently sensing a fish on the hook, Mr. Jones traveled to the U.S. to spend personal time with the friends and families of the investor group. Over a two-month span in the U.S., he managed to garner the trust of the group members, who marveled at his banking expertise and personal charm. According to one source, Mr. Jones exhibited a very confident persona, and had the ability to persuade people into believing whatever he said while manipulating them to do as he wished.
Building on the “close relationship” that Mr. Jones had forged with the group, he established a financial mechanism which would temporarily transfer ownership of the group’s assets to a bank account owned by him, and subsequently swept into the National Bank of Dubai (NBD) in an account set up for the investor group.
Mr. Jones convinced the group that NBD, which was owned in part by his business partner, the brother-in-law of His Highness Sheikh Mohammed, would supply the group with Safe Keeping Receipts for the assets and provide lines of credit with those receipts. This mechanism would produce liquidity for the group, the proceeds of which would be used to invest in a variety of economic and humanitarian projects that had been earmarked by the investor group.
Mr. Jones further explained that, in order to provide maximum return on the investment, the group would have to open “Premier Level Bank Accounts” which would mandate a $300,000 minimum balance for each asset deposited. Each of the group’s assets would also be subject to incorporation in the Free Trade Zone of Dubai, which charged a fee of $10,000 per asset.
Enamored with this deal, the group sent Mr. Jones a total of $4.03 million representing the value of 13 different assets. (It was later discovered that one of the group members forwarded an additional $2 million, which was unbeknownst to the rest of the group.) The funds would stay safe in the NBD account and $130,000 was charged as an expense to set up the incorporations in the Free Trade Zone in Dubai.
The formal contract cementing this business transaction required Mr. Jones to refund all of the group’s deposited funds on demand if certain performance measures were not met.
After seven months, the group soon realized that Mr. Jones was not going to meet those benchmarks, and the ugly truth was starting to reveal itself. After repeated requests to terminate the contract and retrieve the funds, the group contacted the Compliance Officer at NBD and learned that Mr. Jones had in fact never opened the accounts, had lied outright in his communications with the group, and had absconded with their funds. And to add insult to injury, it turned out that his high-ranking resources at the bank were fictional characters as well.

As one group member stated, “It suddenly became clear that his intention was to steal the money from us from the start and, unfortunately, we didn’t bother to undertake any due diligence before entering into this deal.”

CRI Group Investigates
In business transactions of this magnitude, the need for due diligence on all outside parties is obviously essential prior to initiating any talks (or surrendering any financial information, for that matter).
Had the investor group considered conducting an integrity due diligence investigation on Mr. Jones prior to initiating any dealings with him, they would have discovered several obvious inconsistencies that presumably would have halted interactions between the two parties before this individual ever set foot in the U.S.
Retained by the investor group after the crime had taken place, CRI Group launched its investigation in Dubai, where, during the course of several discreet inquiries with close sources representing the Royal Family, it was discovered that the brother-in-law to which Mr. Jones had referred never actually existed, though an individual with a similar name was in fact a director at a local national bank.
Further, through interviews with the compliance officer at NBD and through court-procured documents, it was learned that each round of funds that Mr. Jones deposited into his personal account was quickly followed up with an identical transfer of funds the following day to an offshore account owned by a female accomplice in Monte Carlo.
Additionally, in-depth background checks on Mr. Jones turned up three separate prior criminal cases involving fake checks, and showed that he was wanted by the Federal Police in Dubai. Moreover, the address to the Dubai residence he had given to the investor group led investigators to a demolished building at that site.
CRI Group’s ongoing investigation took our experts to Western Australia where records uncovered a company registered to Mr. Jones which had gone out of business due to failure-to-file laws. Our investigators also located a property in that region owned by the subject worth AUD $5.9 million, along with a AUD $94,000 luxury car.
CRI Group conveyed this information to the legal counsel for the investor group and suggested that they appeal to the UAE Courts to secure a judgment for the recovery of the assets in Australia. Thanks to quick work by the UAE police who worked closely with the local Interpol office, the Australian Federal Police were brought in and the assets that were identified by CRI Group in Australia were promptly seized. That group is presently working with the FBI to locate Mr. Jones and bring him and his accomplices to justice.
Though the subject is still at large, the investor group has recouped a small portion of its stolen funds through the auctioned sale of the assets that were identified in Australia.

Lessons Learned
CRI Group strongly advises that due diligence be conducted on any substantial business transaction with an outside party or potential business partner. Integrity Due Diligence investigations can confirm legitimacy of any individual and can reduce potential business risks by revealing everything from false names, titles and certifications to ascertaining past business dealings, criminal records, executive stability and suspect associations.