Alleged Tenerife scammer Mukesh Daswani arrested in the United Arab Emirates

The alleged ringleader of a 4-million-euro pyramid scheme in Tenerife has been arrested in the Emirates and a Santa Cruz court has ordered his extradition to Spain. An international arrest warrant was issued against Mukesh Daswani at the end of August, the executive president and founder of Tradex Asset Management.

The Department for Economic and Fiscal Crime (UDEF) of the National Police started an investigation in July into a possible pyramid scheme in Tenerife by Tradex, which, according to the calculations of those affected, exceeded four million euros.

Most of the complainants are residents of Tenerife, although as the case was made public, others from mainland Spain also claimed thaey had been scammed, as explained to Efe by Isaac Francisco Pérez, a partner at Sirvent & Granados Abogados, a law firm representing several of the victims who are preparing a class action lawsuit.

So far, the law firm says that they have found out that the company, which is not actually legally registered and is just a trade name, had only been operating for a year to 18 months and promised returns of between 30% and 50% about 45 to 60 days after the investment was made.

To participate, you had to invest a minimum of 5,000 euros at the beginning, which was later increased to 20,000 euros, although some claim that they deposited up to half a million.

Supposedly, the money was invested in the stock market in intraday "scalping" operations, that is, the rapid purchase and sale of securities in the same trading session, and Tradex Asset Management used its own indicators based on technical and fundamental analysis, as advertised on the web.

The law firm suspects that those stock deals never happened and that Daswani was paying old investors with money he was raising from new clients, a traditional Ponzi scheme.

To attract clients, Daswani had a team of four commercials in his office on Calle del Castillo, in the centre of Santa Cruz de Tenerife, although he also had other external collaborators. It was the commercials that sounded the alarm because they began to receive complaints from customers who were not receiving their money.

They asked Daswani but he strung them along with stories until they were able to access the bank account in which the investors' money was deposited, finding the bank balance at zero, according to the lawyer.

The amount of 4 million euros is based on calculations of the investment brought in by the commercial staff, although the valuation is expected to be much higher because of the collaborations and direct funds that Daswani had, according to the law firm.