Dutch police bust Palm scam

Dutch prosecutors arrest executives of Palminvest for selling fraudulent Palm Jumeirah investments.
Dutch police bust Palm scam
By Rob Corder
Mon 21 Jan 2008 10:14 PM

Five officials from a Dutch real estate investment broker have been arrested on suspicion of fraudulently selling bonds linked to property on the Palm Jumeirah in Dubai, Dutch prosecutors said Monday.

The company, PalmInvest, advertised bonds guaranteeing an annual 9% rate of return. Its website offers customers the opportunity to "Invest in Palm Island in Dubai" with a big picture of the Palm Jumeirah, and features several pages promoting the city and its real estate projects.

Investors are asked to make a minimum investment of $75,000, but are guaranteed instant monthly payments based on the 9% annual growth in capital.

According to newswire AP, 90 financial investigators conducted raids on eight offices and five homes in the Netherlands and one in Monaco.

They seized administration and luxury goods as part of the operation, the country's financial prosecutor said in a statement.

"Presumably only a part of the money collected was invested," prosecutors said in a statement. It estimated lost investments would amount to "tens of millions" of euros.

A spokesperson for Dubai-owned Nakheel, the master developer of three palm-shaped islands being built of the emirate's coast, said that they had never heard of Palminvest.

"We have a worldwide policy of only selling property direct to customers, never through agents," a company spokesperson told ArabianBusiness.com.

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