Muhammad Tahir Lakhani and his two sons Muhammad Ali Lakhani and Muhammad Hasan Lakhani, in an astounding about face, are being forced to pay back the well-known US investment firm Yieldstreet $77 million as restitution for a fraud judgment brought against them in a British High Court ruling in October 2020.
The judgment of the British High Court exposed the Lakhani family’s elaborate scheme to defraud Yieldstreet’s US investors, who were devastated by the Lakhani’s criminal acts. These crimes were carried out by the UAE based naval recycling company, Dubai Trading Agency (‘DTA’), of which Muhammad Tahir Lakhani is Chairman. At the time of the ruling Yieldstreet’s CEO and co-Founder Milind Mehere was quoted as saying that “This is a huge win for our investors and Yieldstreet…It demonstrates our relentless pursuit of recovery for our investors across the globe.”
A high-ranking executive at DTA, who spoke on condition of anonymity about the case confirmed over the weekend that “Mr. Lakhani and his sons have taken the difficult decision to agree to reimburse Yieldstreet for the full amount of $77 million”. The source however further stated that “DTA’s Chairman maintains his innocence as well as his sons and made this decision in order to maintain the good reputation of DTA and to satisfy the grievances of Yieldstreet’s investors.”
While this all sounds honorable and the ‘right thing’ for Muhammad Tahir Lakhani to do, further investigations have revealed that Mr. Lakhani and his sons Ali and Hasan were most likely motivated by reasons of self-interest rather than feelings of remorse and guilt for the multi-million USD fraud that they committed. According to a former disgruntled DTA executive “The Lakhani’s kept everyone in the dark about the Yieldstreet fraud and knew exactly what they were doing”.
Muhammad Tahir Lakhani Family Criminal Collaborations
The former executive went on to accuse Muhammad Tahir Lakhani of “collaborating with internationally known criminals who sought refuge in Dubai including the Gupta brothers”. Rajesh and Atul Gupta both of whom are wanted in South Africa for corruption charges and their links to disgraced former South African President Jacob Zuma sought sanctuary in Dubai in 2018.
The Gupta brothers, who were also sanctioned by the US government, were finally arrested on June 2 and will be extradited back to South Africa. Perhaps Mr. Lakhani and sons did not want to have the same fate as the Gupta’s and are now warry of the UAE’s recent crackdown on money laundering and stricter financial oversight on businesses and people (such as the Lakhani’s) who have been convicted of financial crimes overseas.
A recent article by CNN which reviews the Gupta’s case must have sent shockwaves through the ranks of Muhammad Tahir Lakhani’s business empire. Mr. Lakhani’s relationship with the Gupta’s is well known to his local employees. A former logistics manager at Dubai Navigations Corp (one of the many Dubai based companies owned by the Lakhani’s) stated on background last week that “Tahir (Mr. Lakhani) was very close with Atul Gupta…they had many meetings together over the last couple of years at our Dubai office”.
The UAE has the most open and freewheeling businesses environments in the Arab and Muslim worlds and Dubai has been the main playground for Muhammad Tahir Lakhani for the past 30 years. Now that Mr. Lakhani has agreed to reimburse Yieldstreet the $77 million that he and his sons defrauded them of, it’s plainly obvious that the Lakhani’s are going into damage control and do not want to suffer the same outcome of the Gupta brother and other fraudsters such as 52-year-old hedge fund trader Sanjay Shah who is wanted in Denmark of fraud and money laundering charges and was arrested last week in Dubai.
On June 3rd, the National News in Dubai published an article quoting UAE Justice Minister Abdullah Al Nuaimi as saying that he wanted to send a “a clear message on international collaboration on law enforcement”.
In the last year the UAE arrested over 145 people hiding in the Emeriti kingdom for financial crimes. This no doubt has sent a shiver down the spines of Muhammad Tahir Lakhani and his two sons Muhammad Ali Lakhani and Muhammad Hasan Lakhani all of whom have British and Pakistani citizenships.
Muhammad Lakhani Family Criminal Investigations
In 2008 the UK signed an extradition agreement with the UAE. The Lakhani family (who are under criminal investigation in the UK) are now making a concerted effort to clear their names so as not to end up in either a British or UAE prison.
To make matters worse for Mr. Lakhani, a senior Investigator of the Economic Crime Wing of Pakistan’s Federal Investigation Agency (which investigates financial crimes) was now “making inquiries of Muhammad Ali Lakhani’s business activities in Gwadar port based on complaints filed by the Baluchistan provincial prosecutor’s office”. Gwadar port located in the Arabian Sea, is the largest deep seaport in the world and is a prime location for Mr. Lakhani’s naval recycling business.
While this bizarre turn around in Yieldstreet’s quest to recover the $77 million that the Lakhani family swindled from them is good news for the investors who lost their money in this case. However, it must be on the other hand, terrible news for Mr. Lakhani and his sons. Not only do they have to pay back all the money they stole from Yieldstreet, but they now also must worry about possible prison sentences in the UK, the UAE or in Pakistan.