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Tue 22 Jan 2008 03:14 PM

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Palm fraudsters lived playboy lifestyle

UPDATE: PalmInvest directors 'bought four Bentleys at a time', Dutch investigators say.

The directors of Dutch real estate investment broker PalmInvest lived an international playboy lifestyle off the money they made from illegally trading off the reputation of Palm name and Dubai's booming property market, local media reports revealed on Tuesday.

Five PalmInvest officials were arrested by Dutch authorities Monday on suspicion of fraudulently selling bonds linked to property on the Palm Jumeirah, one of three palm-shaped islands Dubai-owned developer Nakheel is building off the emirate's coast.

Dutch newspaper De Telgraaf named two of the arrested officials as Remco V. and Danny K. Their names are protected under Dutch law, but earlier stories prior to their arrest name Remco Voortman and Danny Klomp as directors of the company.

A close associate to directors said the pair splashed hundreds of thousands of dollars every year on travel, cars and other luxury items, gaining a reputation as big money playboys, the paper reported.

“They used to spend 200,000 a year, last year it was closer to 2 million,” the associate told De Telgraaf.

According to the paper, Voortman and Klomp would not buy just one Bentley, but three or four at the same time. They drove the most expensive Porsches and Mercedes, sailed exclusive Riva yachts and wore Rolexes.

The paper described how investigators had been tracking the pair since they returned from recent a trip to Dubai. They were bought to the attention of authorities in December after a spending spree drew attention to their activities.

According to newswire AP, 90 financial investigators conducted raids on eight offices and five homes in the Netherlands and one in Monaco, seizing administration and luxury goods as part of the investigation into PalmInvest's activities.

PalmInvest's website site advertises bonds guaranteeing an annual 9% rate of return and offers customers the opportunity to "Invest in Palm Island in Dubai". Investors are asked to make a minimum investment of $75,000.

“Presumably only a part of the money collected was invested,” Dutch prosecutors said in a statement. It is estimated that lost investments will amount to “tens of millions” of euros.

Nakheel said on Tuesday it was aware of a legal investigation being conducted out by authorities in the Netherlands late last year.

The developer said it would cooperate with any requests from the investigators.

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