Appeals Court Upholds 8-Year Prison Sentence for Company Owner in BD6 Million Fraud Case

TDT | Manama

Email: mail@newsofbahrain.com

The Fifth High Criminal Court of Appeal upheld an eight-year prison sentence against a company owner (the first appellant), along with a fine of BD105,000. The court also ordered him to repay BD6,831,707 and confiscated criminal proceeds amounting to BD6,831,205 from his assets and properties equivalent to the funds involved in the crime.

The case involves fraud, forgery, and embezzlement exceeding BD6 million. The main defendant was convicted of money laundering proceeds obtained from fraud and embezzlement from the private sector, in addition to forging private documents and using them.

Meanwhile, the court sentenced the second to fourth appellants — the CEO and two board members — to one year in prison, but ordered the sentence to be replaced with community service. The court also rejected an appeal filed by the Public Prosecution seeking to oblige the appellants to jointly repay the value of the last two transactions.

The defendants were ordered to pay legal expenses and expert fees amounting to BD812.695, to be shared equally. They were convicted of using funds belonging to investors in the final two transactions for purposes other than those announced by the company.

In its ruling, the court stated that the case against the first appellant included all the legal elements necessary for conviction. The decision was based on witness testimonies, the defendant’s statements during prosecution investigations, the report of the appointed financial auditor, findings from forensic forgery experts, a financial analysis report, and seized cheques.

The court also affirmed that the lower court had clearly outlined the facts of the case and the evidence relied upon in reaching its verdict. The appeals court agreed with the reasoning of the lower court and upheld its ruling as legally sound and consistent with the case facts.

Regarding the second to fourth appellants, the court explained that their one-year prison sentence was replaced with community service after considering the circumstances of the case.

The court noted that the Public Prosecution had accused them of collaborating with the first defendant in embezzling BD320,000. However, it ruled that the legal elements of embezzlement were not established because the funds from the final two transactions were deposited into the company’s account and used in projects previously presented to investors.

Therefore, the court found that the crime of embezzlement could not be established against the main defendant in relation to those transactions, making participation in such a crime legally impossible.

Instead, the court determined that the correct legal description of the defendants’ conduct was the misuse of investors’ funds for purposes other than those declared by the company. The funds were used to pay dues owed to earlier investors whose profits and capital repayments had become due.

Accordingly, the court amended the legal classification of the charges and rejected the Public Prosecution’s appeal demanding repayment of BD320,000, since the revised charge constitutes a misdemeanor punishable by imprisonment only.

The court therefore rejected the first defendant’s appeal, accepted the appeals of the second to fourth defendants by replacing their one-year prison sentences with community service, rejected the prosecution’s appeal regarding repayment of the final two transactions, and ordered the defendants to equally pay the legal and expert costs.