FraudWiki- Report by Ali Salem

February 2, 2022

 

“Please answer me truthfully, are you not like Balqis Al-Haddad?”  questioned an activist named Sheikh Samir in a comment on Silwana Diamond International Company – Yemen’s Facebook post on June 7, 2021.

The post is a link to a WhatsApp group directed at “new members who intend to join.”

As for Balqis Al-Haddad, owner of “Sultana Palace for Import” – one of three Yemeni commercial entities: “Sultana Palace”, “Emaar Tihama Company” and “Al-Hani Honey Company” – is accused by the government of Sana’a – unrecognized internationally – of scamming more than 100,000 citizens as she collected more than 66 billion Yemeni riyals (about $110 million at the exchange rate in Sana’a) during the period 2016 to 2020.

Although the name “Silwana Diamond” was mentioned in the tweets of ‘’Don’t be a fish”, an online campaign launched by activists on social media to expose Multi-Level Marketing (MLM) fraud companies, many Yemenis and Arabs are still trapped by fraudsters. According to this investigation, it is documented that there is a link between MLM companies and cross-border money laundering.

 

Hunting stakeholders

Once the investigator joined the Silwana Diamond WhatsApp group, there were 168 members of both genders, including 148 members with a Yemeni phone number while the remaining members used Arab and foreign countries’ phone numbers such as Saudi Arabia, UAE, Azerbaijan and the occupied Palestinian territories.

Most members of the group agree on describing Ahmed Khalil as the leader. Khalil’s number appears as the group’s admin, in addition to two other admins, one of whom is the creator of the group and uses this phone number (00967776420782).

Khalil, who lives in Sana’a, says his Yemeni team included more than 200 people. He adds: “When you register, you will be the leader of your team in everything.” When we asked him for guarantees before transferring 500 Euros to his account, Khalil replied in a voice message saying it was just a risk.

 

Unlike Sultana Palace Group, which followed traditional methods represented by employing hundreds of women, or known as representatives, whose mission is to spread in residential neighborhoods to attract shareholders. Silwana Diamond uses social media platforms and smartphone apps as means of victimization.

Silwana Diamond- Yemen’s Whatsapp group formation dates back to November 2020, more than six months after the launch of the Silwana Global website, which is a “scam site” according to a technical evaluation carried out by the Scam detector platform. The evaluation gave Silwana Global a medium score in terms of cyber risks, but recommended to take precautions when dealing with the mentioned company.

In addition to Khalil whose number was verified by Truecaller, members of the group made offers to persuade us to register through them. “Pray and ask Allah for guidance and then decide,” this is what Fadhel Mohsen Al-Dhahali told us after noticing our hesitation in registering.

Other than Al-Dhahali, who comes from Yafea area, a large number of Silwana marketers use a religious discourse, led by Abu Hadeeb. However, their religious discourse did not prevent them from lying and forgery, as it was demonstrated by examining documents claimed to be evidence, including transfers through exchange companies inside Yemen, and a certificate allegedly issued by HSBC bank submitted by a person using a number registered in the UAE (0097156248004).

 

Fake HSBC letter used by Silwana Diamond to claim having €500m

 

The fraud is not limited to social media accounts and marketing groups only but also started mainly from the official website of the Silwana Diamond Group.

According to his accounts on LinkedIn and Facebook, the Lebanese Silwana Diamond board consultant, Hani Shaaban, works as a nephrologist at Hammad Hospital University. On the Silwana Group website, Shaaban works as a consultant to the board of directors, a specialist in quantum medicine (relative to quantum physics), and a regional manager for “nano” technology. On the Silwana Infotech website, Shaaban is presented as a specialist in the industrial field with more than 20 years of experience.

During the signing of the Silwana contract with AMOC, Shaaban appeared behind the team of the two companies, performing the task of carrying copies of the contract between the parties.

To find out whether the Yemeni groups that market Silwana Diamond are working alone or with the knowledge of Silwana, the reporter contacted the user of the number (+447401356800), which Silwana allocates for inquiries. We asked him if the Yemeni team was accredited by Silwana and authorized to receive the subscription amounts. The user of the number replied that he would inquire about the topic and then reply. However, he did not respond until the date of the publication of this report despite the fact that we repeatedly asked him while he appeared to be online.

Silwana’s inquiry number

 

Silwana Diamond claims that it was founded in 2011 in Jordan, but the Jordanian register of companies doesn’t include the name Silwana Diamond, and the only company registered in Jordan is “Silwana Diamond for Trade and Investment”, a company owned by: Fadi Muhammad Diab Abu Fanar and Muhammad Musa Hassan Hamdan, with a capital of 100,000 Jordanian dinars equally between the two partners, and Abu Fanar is the representative of Silwana Diamond in Jordan.

Arabian Ponzi

“He who has no secret has no magic”. This is the motto of the founder of Silwana Diamond Companies, Firas Muhammad Abed Abu Hadeeb (44 years old). He belongs to a clan with the same name and is considered a sub-clan of the Jordanian Al-Abadi clan.

Nevertheless, Abu Hadeeb’s magic does not lie in his ability to entrap thousands of citizens in the trap of MLM fraud, but rather in his use of a “Ponzi scheme” to conceal money laundering operations of influential figures and military regimes accused of corruption, according to this investigation.

In 2014, Abu Hadeeb was on the news as a representative of Seven Group. In November of the same year, he registered a company called “Silwana Petroleum (Limited Liability Company)” in Dubai, with a capital of 5 million UAE dirhams. The company’s license expired last November. It has not been renewed until the date of this report’s publication.

The UAE government records show that there are 5 companies linked to Abu Hadeeb’s name, which are:

  • Silwana Horizon International Trading and Importing (One-Person Limited Liability Company), founded in August 2021.
  • Silwana Petroleum (Limited Liability Company), founded in November 2014.
  • Silwana Diamond Investment (Limited Liability), founded in November 2018.
  • Silwana Brokerage for goods listed in the local markets. August 2021.

In addition to another company called “Silwana Infotech” in Dubai.  We did not find data for it in the Emirati records.

Emirati companies records

 

In May 2020, Firas Abu Hadeeb and a British citizen of Egyptian origin, Mahmoud Mohamed Mekheimer el-Adli, registered two companies in London: “Silwana Diamond Trading Finance” and “Diamond General Finance” with limited liability with a capital of no more than £1 for each company.

Abu Hadeeb companies do not give their locations or the locations of their alleged projects, so that their actual existence can be checked by Google Earth. The only exception that was verified electronically is Silwana Infotech, which is located in the Yes Business Center Tower, among 12 companies, not including the rest of Abu Hadeeb investment companies.

The Tunisian Hassouna Zainoubi and Moroccan Sufian Mankou seem to be the architects of the Gogolcoin cryptocurrency project that Silwana claims to own. However, a review conducted by the BehindMLM website on “Gogolcoin” confirmed the existence of fraudulent behavior in the work of the company that does not have real projects on the ground, according to what was stated in the audit report.

The report writer did not find the Gogolcoin currency in the digital currency market nor in the list of currencies licensed by the Central Bank of the UAE.

Losses from fraud using cryptocurrency amounted to $7.7 billion in 2021, according to the “Chain Analysis” report, and the Dubai Electronic Security Center previously warned against dealing with the “Dubai Coin” encrypted currency and considered it a scam. Similar warnings were also issued in several countries, including Britain, whereas the Central Bank of Tunisia refrained from granting licenses for cryptocurrencies.

The investigator presented the lists of companies registered in the financial markets in the Gulf region, such as the Dubai Financial Market, and found no trace of “Silwana Diamond” companies among the licensed companies. It also does not exist in the list of brokerage companies licensed to trade on the Nasdaq Dubai stock exchange.

 

Money Laundering

Abu Hadeeb’s companies provide a perfect example of a Ponzi scheme in network fraud. The company determines the investment value at 500 euros as a minimum, and to get close profits, it requires you to register 3 shareholders. Each shareholder must register 3 others to receive profit and so on. If the shareholder cannot register 3 people in his/her portfolio, he/she must wait until 2027 to obtain profit.

Unlike Silwana, Yemeni entities accused of fraud do not require the registration of three new shareholders to obtain immediate profit, but it is similar to network fraud companies in using the money of new shareholders to pay the oldest shareholders.

Only 10% of the 111,342 shareholders in Sultana Palace received profits exceeding the value of their shares, while 90% did not receive profits or received a percentage less than the value of their shares. According to the Central Organization for Control and Accounting, which participated in the investigation as a member of the “National Committee on AML/CFT” in Sana’a.

In April 2021, media outlets including Emirati newspaper “Al Bayan”, circulated news about the Silwana Diamond Group signing a $5 billion contract with AMOC Company in South Sudan to implement infrastructure projects within the development plans of the Government of South Sudan, a matter that seemed confusing to some observers, especially with the issuance of the Government of South Sudan in July of the same year, a sovereign guarantee of the aforementioned contract amounted to $650 million.

However, a report published last October by The Century – an independent team investigating dirty money linked to African war criminals – solved the mystery. So the contract of Silwana, as it is understood from the report and the documents on which it was based, is linked to the corrupt ruling elite’s need for an external cover to launder the looted money internally, especially after the United States imposed sanctions on businessmen and companies in South Sudan.

However, Silwana’s contract with AMOC did not last long. Last September, South Sudanese President Salva Kiir canceled the guarantee after international donor institutions had threatened to stop aid to South Sudan, according to the Century report and South Sudanese media.

The suspicion of money laundering in the South Sudan contract is consistent with another contract that Silwana concluded in June 2021 with Ada Energy, to explore for oil in Guinea-Bissau, a company that has no activity, according to an open source search.

In the “AMOC” and “ADA” contracts, the role of Silwana was limited to signing, while the task of implementation was entrusted to two local companies, according to what Abu Hadeeb confirmed in a video footage. This type of contract is also similar to the methods of companies used for money laundering and tax evasion. Silwana Diamond, registered in London in the name of Abu Hadeeb and Al-Adly, is an offshore company, with a capital of one pound sterling, according to the documents.

financial situation report of Siwana Diamond in London

 

Breaching Laws

The three Yemeni entities accused of fraud converge with Silwana Diamond, which is registered in the United Arab Emirates, on engaging in activities that do not fall within its legal jurisdiction and deceiving shareholders of projects that generate fantastic profits.

The “Sultana Palace” and “Emaar Tihama” licenses are personnel registry, not companies registry, as their data shows on the Ministry of Economy and Trade’s website. The same applies to Al-Hani and Silwana Diamond, which are limited liability companies.

The UAE law on Commercial Companies defines a limited liability company as “a company that can be formed by a minimum of two and a maximum of (50) fifty shareholders, whose liability is limited to their shares in the business capital.” According to Article 31 of the same law, “only joint stock company may issue negotiable shares, bonds and sukuk.” and similar to that of the Yemeni Law on Commercial Companies.

However, Silwana Diamond and the Yemeni commercial entities covered by this investigation have begun to attract shareholders and collect funds from them in a process that combines fraud and money laundering.

Also, the entities monitored by this report do not announce their annual budget, their auditors, or known bank accounts. Instead, the money is collected through local intermediaries.

Sultana Palace determines the value of the share at 115 thousand riyals (about 191 dollars at the exchange rate in Sana’a). Profits are divided into 60 percent for the employer and 40 percent for the speculator, which can be increased or decreased. In case of loss, the employer loses his/her money, and the speculator loses his/ her effort and work according to what is stated in the contracts of the Sultana Palace.

Citizens are being attracted to contribute to the mentioned companies through brokers and relatives. For example, the broker of Al-Hani Company receives $50 for each person who is persuaded to contribute to the company.

As part of her repeated efforts to persuade the investigator to buy Silwana shares, a member of the Silwana WhatsApp group called Umm Mayar said that Ahmed Khalil receives a monthly salary of $1,000 from Silwana. When we asked her to prove that, she sent copies of money transfers sent through local exchange companies to Ahmed Khalil but an examination of the documents revealed that they had been tampered with.

As for the Sudanese Ala’a Abdul-Rahim, she was fed up with the Yemenis inquiring about investing then go with their money to register through other people, according to an audio message she sent us.

Ala’a Abdul-Rahim is one of Silwana’ marketing team in Sudan, which some of its members went so far as to describe the government job as the era of slavery, according to what Esra’a Abdo Aqlan said in a live video broadcast on her Facebook account.

 

 

Attractive Environment

The severely deteriorating living conditions and war circumstances in Yemen against the backdrop of the so-called coup of September 21, 2014, represent an attractive environment for fraud, especially in light of the collapse of state institutions and the dismemberment of the poorest and least stable country in the Arab region into cantons ruled by militias, according to the reports of the UN Panel of Experts on Yemen.

Sana’a authorities complain about the failure of many of those affected to file formal complaints against companies accused of fraud, which indicates that citizens have little confidence in these authorities which are accused of seizing resources and the funds of companies accused of fraud without returning those funds to the shareholders. This reinforces the hypothesis that the authorities intend to confiscate these funds, according to economic researcher Abdulwahed Al-Obaly.

Citizens’ willingness to invest in suspicious entities also indicates that taking risks in this type of investment seems to be the only option in light of the lack of legitimate earning opportunities. During the first five months of its establishment, the number of shareholders in “Emaar Tihama Contracting and Real Estate Investment” reached 6,000 (at a rate of 1,200 shareholders per month), according to what Radio Yemen FM reported, quoting the company’s lawyer, Majed Sharaf al-Din.

According to official data, the number of those who contributed to the Sultana Palace during the first half of 2020 amounted to more than 99 thousand (90% of the total number of shareholders), at a rate of more than 16 thousand shareholders per month and a value of more than 455,000 shares (79% of the total number of shareholders). These rates are very high in light of the almost collapsing Yemeni economy, according to Al-Obaly.

When the authorities in Sana’a arrested Balqis Ghaleb Ali Al-Haddad in early 2020 on charges of fraud, hundreds of her supporters carried out protests calling for the release of “the mother of the poor,” describing Al-Haddad, whom the Public Prosecution puts at the top of the list of suspects in the Sultana Palace case.

During her detention, Al-Haddad made cash and in-kind donations that fall under supporting the war effort of the coup authorities in Sana’a, which has been waging a war against the internationally recognized Yemeni government and the Arab coalition that supports it for the past seven years.

Among the donations that the Sultana Palace blog published its documents, an amount of 300,000 riyals was deposited on March 31, 2020 in the Military Industrialization account at the Yemeni Post. On April 27, 2020, it provided 400 food baskets to injured fighters through the military hospital in Sana’a.

A donation of 300,000 riyals deposited on March 31, 2020

However, these donations did not intercede for Mrs. Al-Haddad. On July 16, 2020, the Central Bank in Sana’a circulated, under a memorandum of the Public Funds and Anti-Corruption Prosecution, with the temporary seizure of the accounts of 9 individuals and entities, including the Sultana Palace Company and the Emaar Tihama Contracting Company.

The investigator was unable to determine whether these donations were made under pressure or for other reasons. However, the online page of the Sultana Palace hinted in August 2020 to a deal represented in the release of Mrs. Al-Haddad in exchange for the delivery of the seized funds.

 

False Projects

False projects are a major feature of network fraud companies. In the Sultana Palace case, the authorities found a set of sewing machines and a mobile phone shop, which are the total fixed assets, and their value represents 4% of the total shareholders’ funds of more than 66 billion riyals, according to the indictment submitted by the prosecution.

In the case of Emaar Tihama Contracting, the investigators found real estate assets worth 377,000 riyals and 5 cars worth 10 million and 200 thousand Yemeni riyals, all of which constitute 11 % of the total shareholder capital of 3,289,560,000 Yemeni riyals.

In the case of the Al-Hani Company, whose owner, Hani Hussein Shabeel, who works from Malaysia, the authorities found an amount of 5,344,259 dollars deposited in an exchange company in Sana’a. The Yemeni authorities do not have a database of investors with Al-Hani Company.

The former Yemeni Commercial Attache in Malaysia, Othman al-Ahmar, says that the owner of Al-Hani Company stopped collecting funds from new shareholders after the embassy had warned against dealing with him, pointing out that Al-Hani returned the money of a few shareholders who threatened to go to the Malaysian court.

“We no longer receive complaints, and I don’t know whether people have accepted the reality or if they still have faith in the company,” he added. When asked about the number of complaints filed against Al-Hani and the amount of money, Mr. Ahmar did not respond. The report writer tried to contact the Yemeni ambassador to Malaysia, but he did not respond.

The Silwana Diamond Group claims that it has completed 2,600 projects, including 23 projects that it displays on its website, the oldest of which dates back to 2018, but most of those 23 projects have the phrase “Not available yet.”

Marketers of Silwana published videos claiming that they were filmed on the sites of investment projects belonging to the company, however, checking these video clips through reverse search tools showed that they were fabricated and fragmented. The two projects of fish farming and breeding calves, which Silwana claims are being implemented in Wadi Al-Natroun in the Beheira Governorate in the Republic of Egypt, do not exist in the records of the Egyptian Investment Authority.