KPMG are investigating claims from scores of airline industry staff who lost money in a Ponzi scheme
Victims of a Dh440 million Ponzi scheme that duped dozens of UAE airline crew have spoken out about the impact of the scam for the first time.
UTM Online Services Ltd posed as a thriving foreign currency investment firm for nearly two years as it swindled employees of their hard-earned savings.
Initially, early investors were buoyed by the above-average rates of return they were receiving.
But in late 2016, the company, along with a second firm called Exential, was exposed as a sham, with some people losing close to Dh500,000 overnight.
“At the beginning the company was paying out money, so it all seemed real,” said Dejan Simic, an Emirates airline crew member from Serbia who lost more than $130,000 (Dh477,000).
“I was travelling with work so much, saving was easy. At one stage, on every flight five or six people would have accounts with either Exential or UTM encouraging others to invest.
“When payment problems with Exential started, people tried to take their money out to invest in UTM.
“Then UTM also collapsed without any warning and all communication with our account managers stopped. It sent me into a spiral of depression.”
Earlier this year, accountants KPMG were appointed by the London High Court to liquidate UTM Online Services.
The firm operated offices in both Bulgaria and the UK, but the majority of its investors were based in the UAE.
Last month, financial investigators visited Dubai to track down and interview the scheme’s victims.
Lawyers were told the scam had promised five per cent returns to investors who opened an account with at least $10,000 (Dh36,700) when it launched in 2015.
Dragan Kostic, 40, another Serbian cabin crew member with Emirates, said he was also promised big returns.
He revealed he was enticed into the scheme by a UTM Online Services account manager who said he traded in currency markets.
After careful thought, and against the advice of senior pilots, he deposited $100,000 (Dh367,000) – his life-savings – into four accounts.
He said he had hoped to make enough profit on his investment to buy a home for his young family. Investors were promised higher rates of return the more money they put down.
“The UTM chit-chat started on planes among crew,” said Mr Kostic, who has a daughter and a pregnant wife to support.
“Colleagues said they were earning serious money, so I was interested.
“Looking back this was a big problem. I had no experience of managing investments like this.
“I relied too much on unqualified people who I didn’t know managing my money.
“When the money was being paid out, no one listened to the warnings. We were all tempted, but like Exential, greed was the biggest issue.”
Towards the middle of 2016, it was revealed Exential had conned thousands of investors with the promise of fast cash on a $25,000 (Dh91,000) deposit.
Account managers promised returns of 20 per cent, but the reality was that any cash paid out was money from new investors.
One of those involved, Sydney Lemos, 38, from India, was convicted of his part in the scam by Dubai courts last year.
He was sentenced to 500 years in prison – a year for each successful criminal complaint against him.
People still do not understand that although a lot of the investors are in the UAE, the companies behind the scheme are British and the money went to eastern Europe
Speaking to The National this week, David Standish, head of contentious insolvency at KPMG, said the recovery process for victims of UTM Online Services could take years.
“There is still a lot of work to do but we are looking at certain legal actions both in the UK and other countries,” he said.
“People still do not understand that although a lot of the investors are in the UAE, the companies behind the scheme are British and the money went to eastern Europe.”
KPMG is currently vetting claims and verifying potential UTM assets discovered by recovery specialists from UK law firm Carlton Huxley.
“From the enquiries we have made to date, we believe hundreds of investors with UTM Online Services are in Dubai, many are from the airline industry,” said lead investigator and Carlton Huxley director, Bill Ferguson.
“While we are optimistic, we can never give any cast iron guarantees when recovering money.
“Recovering cash and any assets we find is only part of the process. We need UTM investors to contact us so we can process their information and prove any claim they may have is genuine.”