Submarine fraudster stole millions, Dubai World tells US court

Firm accuses him of fraud, theft in US court case; Jaubert fled Dubai in rubber dinghy in 2009
Submarine fraudster stole millions, Dubai World tells US court
Herve Jaubert, the ex-CEO of Dubai World subsidiary Exomos
By Gavin Davids
Wed 16 Feb 2011 03:21 PM

A former Dubai World employee has been described to a Florida court as a “master manipulator” who defrauded the company out of millions of dollars by lawyers for the state-backed firm.

Herve Jaubert, the ex-CEO of Dubai World subsidiary Exomos established in 2004 to design and build submarines, is accused of fraud, breach of contract and of racking up $31m in debt.

Lawyer William Urquhart told a jury at Fort Pierce federal courthouse that Jaubert had built vessels that failed safety tests before fleeing Dubai with millions in company cash.

“The company lost $31m and not a single product was sold; not a single penny received,” he said in his opening statement, reported by news site TCPalm, while he displayed dozens of detailed documents detailing how Jaubert diverted $3.8m in Dubai World funds for his own use.

Jaubert, a former French special agent, was first approached by Dubai World in 2003 in his role as founder of Seahorse Submarines International.

By 2004, Jaubert had sold his firm to Dubai World and been appointed as CEO of Exomos.

Through his company, Seahorse Submarines, he allegedly bought equipment worth $3.2m for the Dubai World subsidiary, but it did not all arrive.

Jaubert had a contract to build two submarines for Dubai World, but when the vessels were delivered, they were found to be incomplete and faulty.

“They simply didn’t work. Water leaks, lots of leaks...submarines and leaks under water are a pretty terrifying thing,” Urquhart told the court.

According to Dubai World, Jaubert had agreed to settle the matter by paying an initial AED3m ($816,750) upfront, but fled the country before handing over any money.

Jaubert told Arabian Business in 2009 he had fled Dubai aboard a rubber dinghy, dressed in a burqa to evade police, using skills he had developed during his former career as a French special agent.

He said he had spent six hours aboard the rubber dingy before meeting his friend, who had sailed his boat into international waters, and the pair headed to India on a journey that took eight days.

Jaubert was sentenced in absentia to five years in jail in June 2009 and a fine of AED14m ($3.8m) by a Dubai court in June 2009.

Dubai World in September 2009 filed a fresh case against him in US federal court.

During the Florida trial, Jaubert’s attorney, William Hess insisted that Dubai World was lying about Jaubert, his submarines and events that had led to his escape.

Jaubert has countersued the conglomerate, claiming he was falsely accused of embezzlement and threatened with incarceration after his passport was confiscated and he was fired from the firm.

Hess said that the submarines Jaubert had built in Dubai were successfully tested and worked as designed, with several models displayed at international boat shows in the emirate.

“There is a far different picture than what’s been displayed so far,” he said, adding that records would prove that all invoices and surcharges submitted by Jaubert were approved by Sultan Ahmed bin Sulayem, CEO of Dubai World.

The trial continues.

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