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Wed 16 Feb 2011 03:21 PM

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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
Submarine fraudster stole millions, Dubai World tells US court
Herve Jaubert dressed in a wetsuit and mask and holding flippers before he fled from Dubai on board a rubber dingy
Submarine fraudster stole millions, Dubai World tells US court
Herve Jaubert, the ex-CEO of Dubai World subsidiary Exomos

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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Expat Writer 9 years ago

Good luck to him!

Capt.Hamid 9 years ago

I believe there were not specialized inspector in Submarines industry, to inspect the machine before delivery. As long as i know for heavy duty machines like trains,planes, ships etc, there is a before delivery test which takes days and standard procedures being signed with an authorized inspector from manufacturer and buyer side every phase of test. On the other hands, the business was not done based on bank guarantees and looked the buyer trusted the seller personally not professionally.

Fact 9 years ago

Whats happening in Dubai now is anyone who owes money to Nakheel or other local companies will have to stand trial and go to jail, but in cases where these companies have to make payment like to the small contractors, they have to accept the terms of Nakheel or just forget about the money

Kelly 9 years ago

Let me make this clear - this particular gentleman is an outright fraudster and thief (something he acknowledged when he agreed to return the funds he stole - before then escaping under the cover of darkness). There are businessman out there who deserve sympathy but please be assured that this guy is not one of them. I mean really - does anyone out there seriously believe his nonsense about dressing in a burqa and then swimming out and cutting petrol lines of naval boats etc etc.

Andre 9 years ago

I read his book "Escape from Dubai", which was interesting - to say the least! However, his ranting - in the last chapter - against the UAE as a whole was superfluous and seriously casts doubts about his professionalism!

But why would a person who 1). had successfully built subs before coming to Dubai, 2). was invited to setup in Dubai, 3). came from a naval background, build sub-standard subs, and do a runner..??

It doesn't add up..! Especially seeing he escaped in 08 and was sentenced (in absentia) in 09, and any diversion (from the real estate mess) was a good diversion.

Herve Fan 9 years ago

Herve is innocent and is no fraudster. He agreed to return the allegedly stolen funds as he had no other choice. If he had refused he would have been put in jail in Dubai and never see the light of day again. He made a plan to escape and carried it through. He is a hero and I wish him all the luck in his case.