Gosaibi: The $10 billion Fraud (Re-post)

It seems as though the Gosaibi story continues to gain momentum and the interest of the global community. The dominant merchant family of the Kingdom shook the Gulf region when in May parts of the family conglomerate, Ahmad Hamad alGosaibi & Brothers (AHAB), defaulted, and prompted lawsuits in various countries. This week the shock turned to astonishment.

Documents filed in New York’s state Supreme Court claim that AHAB has been a victim of a “massive fraud” orchestrated for years by its managing partner and son-in-law, Maan al Sanea. In AHAB’s claim they allege that Mr Sanea “misappropriated” around $10 billion in the alleged swindle.

AHAB claims that Mr Sanea was until very recently a “senior executive” of its financial-services arm – the Money Exchange – which mainly handles remittances of workers inside and outside Saudi Arabia. The statement by the company claims that Mr Sanea made use of this position to borrow from banks “using forged or falsified documents”. He then “diverted the funds received to his own use.” Having these huge amounts of cash constantly sloshing around in the Money Exchange’s accounts allowed Mr Sanea to siphon off some of it by, among other things, writing fraudulent cheques, and transferring cash to people, companies and accounts that he “controlled directly or indirectly”. It continues to say that Mr Sanea told AHAB employees not to record the transactions in the company’s books and in July 2006, it alleges, he sent a memo to senior employees of the Money Exchange telling them to withhold any messages intended for the board of directors and “to deliver those communications to him instead”. AHAB says Mr Sanea’s maneuvers allowed him “to continue looting AHAB and to conceal the massive scope of his thievery from AHAB and its Board”.