European Investor Sentenced for Multi-Million-Dinar Money Laundering Operation in Bahrain

TDT | Manama

Email: mail@newsofbahrain.com

A complex and meticulously planned money laundering scheme has been uncovered in Bahrain, involving a European investor and several accomplices. The primary defendant used the fame of global sports stars and their signed memorabilia to trick victims into investing in a fraudulent operation. With the help of a massive media campaign, he successfully ensnared approximately 181 victims, collecting over 3 million Bahraini dinars while attempting to conceal the illicit origins of the funds.

Following the arrest of the second defendant, who appealed the verdict, Bahrain's First Criminal Court sentenced her to one year in prison. Earlier, the court had sentenced a fictitious European investor to eight years in prison, along with a fine of 100,000 dinars. The court also ordered the confiscation of the crime's proceeds and demanded the return of 3,371,250 dinars and 600 fils to the rightful owners.

The second defendant, who had contested the verdict, was sentenced to one year in prison, while the third defendant—still on the run—was sentenced to five years in absentia, along with a fine of 100,000 dinars. The fourth defendant received a one-year sentence and a fine of 5,000 dinars, and the fifth defendant, a company involved in the operation, was fined 100,000 dinars. The court also ordered the confiscation of assets linked to the money laundering scheme, amounting to 1,843,189 dinars and 121 fils, as well as any other assets equivalent to the value of the crime.

The investigation revealed that the first defendant used a fraudulent investment scheme to gather and receive funds from unsuspecting investors. He established a company in a well-known property location, collecting over 3 million dinars and disguising his operations from banks by using fake invoices and purchase orders. Investigators discovered that the first defendant had a criminal history in multiple countries for fraud, embezzlement, and money laundering. To evade detection, he used over five different aliases, changing his name and nationality multiple times.

The investigation further revealed that the first defendant arrived in Bahrain in 2022 and initially set up a digital company to sell memorabilia and valuable items such as signed sports jerseys and equipment from famous athletes. He rented 44 offices and employed a large sales team to attract investors. He held meetings to train his employees on how to sell parts and shares of the memorabilia at prices he determined, while offering them monthly profit shares. Employees were incentivized with commissions for each new investor they recruited, and the first defendant specifically targeted employees with connections to wealthy individuals to give the scheme a semblance of legitimacy.

The defendant's actions continued to deceive investors by promising returns and using funds from new investors to pay out fake returns to older investors, creating a false sense of success for the company. Some investors were even issued checks that later turned out to be worthless. Despite the appearance of legitimate business activity, the defendant was running a Ponzi scheme, designed to siphon money from new victims to cover earlier payouts.

Intensive investigations confirmed that the first defendant was the controlling figure and actual manager of the company, which was owned by the second defendant, recently arrested. The investigation also revealed that the first defendant had collaborated with her to artificially inflate the value of memorabilia, deceiving investors into believing the items were worth far more than their true value. The second defendant cooperated with the first defendant in bringing goods into Bahrain, and silver-colored labels, linking the items to the scheme, were found at the first defendant's residence.

The third defendant, still at large, acted as the financial advisor to the first defendant, advising him on how to hide his operations from the banks. He traveled to Bahrain and held virtual meetings with the first defendant and accounting staff. Investigators confirmed that without the third defendant's assistance, the first defendant would not have been able to carry out his crimes without detection.

The fourth defendant initially entered the scheme as an investor, but after receiving returns, he grew closer to the first defendant. Eventually, the first defendant offered him a position as an intermediary to bring in new investors for a 22% commission. The fourth defendant successfully recruited several investors, receiving funds for investment in the fraudulent operation.