Saudi Arabia Exposed: Ponzi Scheme Examples Reveal Shocking Levels of Fraud

A UK law firm has revealed that a Saudi Arabian family and a Kuwaiti-born businessman defrauded scores of banks out of $126 billion, in what is being described as one of the largest Ponzi schemes in history. This shocking revelation comes after a 10-year dispute played out in international courts between the Al Gosaibi family and the Saad Group over who was responsible for the collapse of each other’s business empires.

The Fraudulent Activities

According to court documents, AwalCos, a group of companies formed part of the business empire of Maan Al Sanea, owner of the Saad Group. The liquidations followed one of the biggest corporate collapses in Saudi Arabian financial history - that of the Ahmad Hamad Algosaibi & Brothers Company (Ahab).

• Ahab and the Saad Group both defaulted amid the 2008-2009 global financial crisis, leaving international and regional banks and other creditors owed billions of dollars.
• The Cayman Islands court has now dismissed claims against the Saad Group, finding that Al Gosaibi knew of and authorized the fraud carried out by the Saad group.

The Ruling

The chief justice of the Grand Court of the Cayman Islands, Anthony Smellie QC, described the fraud as “one of the largest Ponzi Schemes in history” and stated that Ahab had concealed its active role in the fraud on the lending banks since 2009. The court found that Al Gosaibi’s managing director, Maan Al Sanea, was involved in the fraud from 1981.

Implications

The ruling is seen as a major victory for creditors who will finally be reimbursed after years of legal battles. According to Stewart Hey, partner at Charles Russell Speechlys, the decision means that many millions of dollars will be returned to creditors.

• This is not the first instance of Ponzi scheme examples in Saudi Arabia.
• The country has been plagued by financial scandals and corruption, with many individuals and companies embroiled in fraudulent activities.
• The Al Gosaibi feud trial was one of the biggest ever recorded, with a total value of $9.2 billion claimed.

Call to Action

The ruling highlights the need for increased transparency and accountability in Saudi Arabia’s financial sector, and serves as a warning to other individuals and companies engaged in fraudulent activities.

• The Al Gosaibi family and Maan Al Sanea are now considering their legal options.
• This case emphasizes the importance of vigilance in detecting and preventing Ponzi schemes, which can have devastating consequences for innocent investors.