Authorities began an investigation yesterday into charges of fraud against 41-year-old Haitham Adnan Abdel Hamid el-Shamy, who is accused of swindling 200 people in an online scam that collected more than LE200 million.
The investigation is being carried out by the General Department for Public Money Investigations, the General Administration for Information and Documentation at the Ministry of the Interior, and the Nasr City Prosecution. El-Shamy is accused of collecting money from people in ten Egyptian governorates and eight other Arab states, including Morocco, Iraq, Saudi Arabia and Bahrain, to speculate in the stock market using the Forex Trading System.
Investigators found that the suspect relied on photos depicting him with important officials and media figures to convince his victims to invest with him.
Victims said that el-Shamy has a link to a son of a former senior security figure, whom they believed to be his partner. The claim was denied by an official security source, who said that the son of the security figure himself was a victim to the fraud, adding that the suspect is being traced, and that his company in Nasr City has been seized. There is also speculation that a famous TV announcer was been involved in the scam.
Reports submitted by victims of the fraud all said that they lost their money after investing with a Nasr City-based company called Arabic Generation. El-Shamy allegedly met investors through www.arabicgeneration.com, which billed itself as a forum for learning stock market speculation, Islamic investment, and other financial services.
The scam provided daily interest, monthly interest, and annual interest to investors. Interest rates started at 2.5 percent, but later soared to 60 percent, according to victims, who told Al-Masry Al-Youm that they were so impressed with el-Shamy’s returns that they would have voted for him if he ran for public office.
One victim, who met el-Shamy through the Arabic Generation online forum, said el-Shamy’s tone was decent and convincing, which allowed him to attract many investors, particularly among youth. The victim said young investors paid el-Shamy small amounts and then collected more money from their relatives and acquaintances after receiving 60 percent returns on a month of investment. The victim explained that he started with US$10, and that the huge returns tempted him to invest larger sums.
Other users paid up to LE50,000 and LE120,000, the victim said.
A number of young people from Giza, Port Said, and Beheira said that they withdrew loans from banks to invest with el-Shamy, who received the money either online or through mobile phone transfers. His relationship with a major Forex trader increased confidence in his credibility.
Victims said in their report that when they went to visit Arabic Generation’s headquarters, agents told them that el-Shamy had been missing since Tuesday.
Al-Masry Al-Youm visited the Arabic Generation headquarters in Nasr City. The suspect had rented an apartment in a neighborhood behind Rabea el-Adaweya Mosque. He put up a sign reading in English and Arabic "The Arabic Generation." Neighbors said that three months ago the suspect asked the landlord to rent an apartment on the ground floor. Two days later he said he needed two women and a man to run the office.
El-Husseini Ismail, the victims’ lawyer, said that his office submitted 60 reports to the General Department for Public Money Investigations. According to Ismail, the Arabic Generation website has been shut down since the reports were filed. The suspect, says Ismail, swindled Egyptians and non-Egyptians out of their money.
Tamer el-Masry, supervisor of the Arabic Generation Forum for Electronic Speculation, said that el-Shamy disappeared after he lost all the money he had gathered. He added that el-Shamy paid part of his profits to the depositors. The last instance of payment was at the beginning of December, according to el-Masry.
El-Shamy lost the rest of his money in his speculations and had nothing left, and so he escaped, el-Masry said. Arabic Generation employees said that el-Shamy had collected around LE24 million.
El-Masry said he never had any suspicions concerning el-Shamy’s investment strategies until he learned the Forex speculation system. Then el-Shamy posted a report on his operations on the website, but nobody read it thoroughly.
According to el-Masry, one Moroccan member of the forum said the report was fake, but nobody believed him because they trusted el-Shamy. El-Masry said he then reviewed the report himself and found that the Moroccan was right.
Translated from the Arabic Edition.
