Saudi Business Empire Embroiled in Largest Ponzi Scheme Ever Seen, Judge Rules

A Landmark Case in the Cayman Islands

A significant case has come to an end after a judge ruled that a Saudi Arabian business empire was complicit in defrauding over 100 banks of billions of dollars. The liquidators have dubbed it “the largest Ponzi scheme the world has ever seen,” while the judge labelled it a “cauldron of corruption.”

Background

The case began in July 2016 and spanned over seven years, involving the collapse of family-owned Saudi conglomerate Ahmad Hamad Algosaibi & Brothers (AHAB) in 2009. The court found that the company’s financial empire was crippled by an estimated $6 billion fraud from within.

Maan Al Sanea: The Center of the Scheme

At the center of the scheme was Maan Al Sanea, who married into the family and managed its finances. Al Sanea was accused of forging documents to borrow billions of dollars without authorization and transferring much of it to accounts in the Cayman Islands.

AHAB Partners: Primary Architects of the Scheme

However, instead of being solely responsible for the fraud, the judge found that Al Sanea had full knowledge of the AHAB partners who were the “primary architects” of the scheme. The partners allegedly accepted Al Sanea’s borrowing activities as a form of payment for running a corrupt Money Exchange, which was used to funnel billions of dollars into their own pockets.

The Money Exchange: A Criminal Enterprise

The Money Exchange, established in 1981 and collapsed in 2009, saw over $330 billion flow through it during its existence. The judge described it as a “criminal enterprise” from start to finish.

Key Facts

• Over $6 billion was fraudulently borrowed by AHAB
• Maan Al Sanea was accused of forging documents to borrow billions without authorization
• Partners accepted Al Sanea’s borrowing activities as payment for running the corrupt Money Exchange
• Over $330 billion flowed through the Money Exchange during its existence
• The scheme defrauded over 100 banks

Reaction from Liquidators and Judge

Steve Akers, a partner at Grant Thornton and one of the liquidators involved, stated that revealing the truth has required a massive investigative, forensic, and legal effort. “The outcome of this hard-fought litigation has highlighted an extraordinary fraud perpetrated over a protracted period of time,” he said. “The losses involved are many billions of dollars.”

Chief Justice Smellie described the scheme as follows: “This was a fraud carried out, with increasing sophistication, from as early as 1981. The total sums borrowed pursuant to AHAB’s fraud numbered in the hundreds of billions of dollars. In short, this was an enormous, long-standing Ponzi scheme which defrauded more than a hundred banks.”