Dubai court orders fraudster to repay AED7.49m in fake server deal scam, plus AED500,000 compensation

The Dubai Civil Court ordered a man to return AED7.486 million to a company after he embezzled the funds using a forged electronic customs declaration. The court also ordered him to pay AED500,000 in compensation for the damages suffered by the company. It found that he had deceived the company by using a forged official document to make it appear that he had imported a shipment of computer servers. A final criminal ruling had previously convicted him, sentenced him to one year in prison, and imposed fines equivalent to the embezzled amount in addition to AED150,000. According to the lawsuit, the defendant deceived the plaintiff company by convincing its officials that there was a deal to import computer servers through a company he owned. He used a forged customs declaration attributed to Dubai Customs to give the transaction an appearance of legitimacy and induce the company to transfer the funds. The company fell victim to the scheme after believing the documents and information provided by the defendant were genuine. It transferred a total of $2.04 million, equivalent to AED7.486 million, through three bank transfers. The company later discovered that it had been the victim of fraud involving a forged official document. After discovering the deceit, the company filed a criminal complaint. The Dubai Public Prosecution referred the accused to the Criminal Court, which convicted him and sentenced him to one year in prison. The court also imposed a fine of AED150,000, in addition to a fine of AED7.486 million, representing the value of the funds involved in the crime. It ordered his deportation and the deletion of the forged data. The Court of Appeal upheld the ruling, making it final and binding after no appeal was filed before the Court of Cassation. After reviewing the case, the Dubai Civil Court stated that a final criminal judgment has binding legal force before civil courts on matters it has conclusively decided, particularly the occurrence of the crime, its legal classification, and its attribution to the perpetrator. The court found that the defendant’s wrongdoing had already been established by the final criminal ruling. It said the role of the civil court was therefore limited to assessing the damages suffered by the company and determining the amounts due to it. The court examined that the documents showed the funds were transferred from the plaintiff company’s account to the account of a company in an Asian country owned by the defendant through three bank transfers. It found that the defendant had seized and embezzled the money with the intention of possessing it and causing harm to the company. Regarding compensation, the court found that the company had been deprived of the use and investment of its funds for more than a year. This caused material damage by depriving it of the opportunity to invest and benefit from the money. The court concluded that the elements of tort liability had been established and ordered the defendant to pay AED500,000 in compensation. However, the court rejected a request to compel the second defendant company to jointly return the funds and pay compensation, even though the fictitious deal was linked to its name and the accused was a partner in it. The court explained that the company has a legal personality and financial liability separate from those of its partners. It said that a criminal conviction against a partner alone is not sufficient to hold the company responsible for debts arising from that partner’s actions. The court noted that the case file contained no evidence proving that the claimed amount formed part of the company’s financial liability. It also noted that the lawsuit relied primarily on the criminal judgment issued against the first defendant. The court therefore rejected the claim against the company and ordered the defendant alone to pay the amount, compensation, fees, expenses and legal costs.