More arrests over 'Ponzi scheme on steroids' that snared UAE investors

Two British men arrested in Spain face up to 20 years in a US jail for recruiting agents who scammed investors, including in the UAE, out of millions of dollars through a fake property business. James Robinson, 46, and David Kennedy, 47, received more than $2 million in commissions from the Bar Works Ponzi scheme that snared investors into a sham co-working space investment project, New York prosecutors alleged. Through their United Property Group (UPG) company, a real estate brokerage in Spain, the men solicited victims to invest more than $7.5 million into the scam. The pair recruited agents to sell workspace leases in Bar Works and provided them with fraudulent documents and other information. Victims paid out between $22,000 and $30,000, on average. Damian Williams, the US Attorney for the Southern District of New York, said in a statement that Robinson and Kennedy have each been charged with one count of wire fraud and one count of wire fraud conspiracy. Each carries a maximum sentence of 20 years in prison. The US is seeking an extradition order from Spanish authorities for both men. The Bar Works scheme offered investments into former bars and restaurants around the world, repurposed as temporary office space for hot-desking freelancers and remote workers. Spaces were rented out with a membership fee, with investors promised annual returns of 14-16 per cent. It total, those behind the scam fraudulently obtained more than $57 million from at least 800 victims — with several dozen based in the UAE and others in Thailand, Saudi Arabia, Indonesia, the UK, Singapore, Russia, the US, Portugal, Qatar, Spain, Jordan, Oman and Hong Kong. The scheme collapsed in June 2017. One of those behind the Bar Works fraud, Briton James Moore, 60, was sentenced to 11 years in a US jail in February. By providing a front for the operation and a huge network of agents via UPG, Moore claimed a 35 per cent stake in the business. Collectively, Moore and UPG would obtain 65 per cent of every dollar invested into the scam. Moore was also sentenced to three years of supervised release, forfeiture of $1,599,257.46, a fine of $50,000 and told to repay victims $57,579,790 as part of a restitution order. New York prosecutors described the fraud as a “Ponzi scheme on steroids” when sentencing Moore in February. “Moore and affiliated companies siphoned 65 per cent of each of their recruited victims’ investments,” said Mr Williams. “Moore then obstructed justice and lied about the scheme to federal agents. “His lengthy sentence sends a clear message that perpetrators of investment fraud will be prosecuted and held accountable.” Another involved was Savraj Gata-Aura, 36, who pled guilty for his participation in the scheme and was sentenced to 48 months in prison on July 27, 2020. However, the main instigator of the fraud, Renwick Haddow has yet to be sentenced. Haddow operated locations in New York City and elsewhere between 2015 until 2017 and accepted millions of dollars in investments from investors recruited through UPG, Among others. Before launching Bar Works, Haddow had been disqualified as a director of any UK company for eight years and was later sued by Britain's Financial Conduct Authority for operating investment schemes through misrepresentations that lost investors substantially or all of their money. It is alleged Robinson and Kennedy hid the true identity of those behind Bar Works, so as to not deter investors from parting with huge sums of cash. Victims were given a name — “Jonathan Black” was the fictitious chief executive of Bar Works — and told he had an extensive background in finance and past success with start-up companies. Haddow, 54, was arrested in Morocco in 2019 and extradited to the US. After agreeing a co-operation agreement, Haddow pled guilty to one count of wire fraud and wire fraud conspiracy relating to the Bar Works scheme and to the same charges relating to a separate Bitcoin-related investment scheme. He is due to be sentenced on April 28, 2023.

More arrests over 'Ponzi scheme on steroids' that snared UAE investors

Britons who earned $2 million in commissions from co-working space con arrested in Spain