Company run by former ‘Maltese citizen’ stole more money than established by US court

Abraaj Group, a Middle Eastern private equity firm that was managed by an Egyptian who bought Maltese citizenship, is believed to have stolen $385 million from investors instead of the original estimated $250 million.

Mustafa Abdel Wadood was the firm’s former managing director – an Egyptian who had purchased a Maltese passport not long before his arrest. The Shift had revealed that Abdel Wadood was facing charges for misappropriating millions of dollars at the Abraaj Group.

He originally entered a not guilty plea for charges of securities fraud, wire fraud and conspiracy but later admitted to the charges.

The Group’s CEO, Arif Naqvi, stole $385 million between 2009 to 2018 as he moved money for his own use in more than 3,700 transactions, US prosecutors are now saying. Originally, the liquidators had estimated that the amount was around $250 million.

Naqvi is one of six former executives of the Abraaj Group currently facing charges related to fraud and misappropriation of funds.

Abdel Wadood pleaded guilty to seven counts and is cooperating with the US government. Naqvi is under house arrest in London and, as the US government is attempting to extradite him, Abdel Wadood is awaiting sentencing.

Identity Malta revoked Abdel Wadood’s citizenship only after he pleaded guilty. The agency had insisted on its robust due diligence processes despite having Abdel Wadood being arrest only months before his arrest in the US.

He is the only one of the six members who pleaded guilty and cooperated with the US courts. Besides Naqvi, others facing charges are Waqar Saddik, former managing partner and supervisor of operations, Saif Vettefettbilay, former administrative partner and Ashish Dave, former chief financial officer.

Liquidators are trying to trace the transactions and asked a New York Judge for permission to file subpoenas on 18 banks. This information will then be used in a lawsuit which will be opened in the Cayman Islands in an attempt to recover the funds.

Abraaj Group, founded in 2002, was considered the biggest private equity fund in the Middle East. It was also acclaimed as one of the most influential emerging market investors in health care, energy and real estate all over the globe including Asia and Latin America.

At its peak, it claimed to manage almost $14 billion in assets but was forced into liquidation in 2018 after investors including the Bill & Melinda Gates Foundation commissioned an audit to investigate alleged mismanagement of money in Abraaj’s $1 billion healthcare fund.

That investigation attracted the attention of the Securities and Exchange Commission and other US authorities.

The US government is claiming that the financial crimes and misappropriation date back to 2014. Abdel Wadood acquired his Maltese citizenship in 2018.

When questioned by The Shift, Identity Malta had said it took matters “very seriously”. Yet Abdel Wadood’s was not the only cause that raised questions on the agency’s due diligence processes.

Chinese billionaire Liu Zhongtian who was charged with evading $1.8 billion in aluminium tariffs also holds a Maltese passport and is registered as living in a seedy Naxxar flat since 2016, despite his wealth.

In another case, a company owned by a Russian with a Maltese passport was raided on suspicion of financial crimes in Finland last year. Chairman Pavel Melnikov has a Maltese passport, claims residence in Hungary, and has a web of businesses and property in Poland, Latvia,  Finland and Russia.

Anatoly Hurgin, an Israeli citizen who bought Maltese passports for himself and his family in 2016 is also currently facing fraud charges in both the US and Israel. Israeli authorities arrested a number of employees of his company Ability Inc on suspicion of committing ”offences of fraud, smuggling, and money laundering on a significant scale”.