Briton jailed for 11 years over Bar Works scam that trapped dozens in UAE
A British fraudster was sentenced to 11 years in prison on Tuesday for a financial scam that claimed more than 800 victims, including several dozen in the United Arab Emirates.
In addition to the prison sentence, James Moore, 60, was sentenced to three years of probation, forfeiture of $1,599,257.46 and a fine of $50,000.
Moore must repay his victims $57,579,790 in a restitution order issued by the court for the Southern District of New York, the district attorney’s office said in a press release.
He was convicted of wire fraud and wire fraud conspiracy in 2019 for his role in start-up Bar Works, which offered companies shared office space in trendy renovated bars and restaurants.
Dozens of UAE residents were among hundreds of victims around the world who invested in what prosecutors called a “Ponzi scheme on steroids”.
New York prosecutors say Moore teamed up with Renwick Haddow, another Briton, to recruit agents to raise more than $50 million from investors.
“James Moore has teamed up with notorious fraudster Renwick Haddow to engineer a massive Ponzi scheme that has attracted hundreds of unsuspecting investors from around the world,” US attorney Damian Williams said on Tuesday.
“Moore and its affiliates misappropriated 65% of the investments of each of their recruited victims.
“Moore then obstructed justice and lied about the scheme to federal agents. Today’s lengthy sentence sends a clear message that perpetrators of investment fraud will be prosecuted and held accountable.”
Mr Williams said Moore knew Bar Works was a “Ponzi scheme on steroids”, designed to extract as much money as possible as quickly as possible before collapsing.
“They did not hesitate”
“Moore didn’t stay for the collapse; it raised $1.6 million before starting afresh with a project to invest in a copious coworking space,” Williams said.
“Far from being discouraged by Haddow’s story, Moore saw the opportunities for massive profits and sought to join him.
“And although it was obvious from the start that Bar Works could only support itself with money from new investors, Moore had no hesitation in expanding the Ponzi scheme and later copying the idea. .”
Bar Works coworking spaces have been rented publicly with an annual fee. Investors were told they would receive an annual return of 14-16%.
Over 800 victims were enticed to invest from UAE, Thailand, Saudi Arabia, Indonesia, UK, Singapore, Russia, USA, Portugal, Qatar, Spain, Jordan, Oman and Hong Kong.
Who are the two men behind Bar Works?
Moore offered a seemingly legitimate alternative at the helm of the company to Haddow, who was already serving an eight-year ban from the UK director for fraudulent activity.
Moore and Haddow knew each other well. In 2009, they were partners in a hotel fractional interest selling program called Room to Invest.
Like Haddow’s many other lucrative projects, it also fell apart.
The two met regularly in Miami and Dubai, with Moore guesting at Haddow’s wedding.
The pair then struck a deal for Bar Works in 2015, with Moore claiming a 35% stake for his role in providing a front for the operation and an extensive network of agents through the United Property Group (UPG).
Moore and UPG would collectively get 65% of every dollar injected into Manhattan-based Bar Works by recruited investors.
That left only 35% for Haddow’s cut, annual interest payments of 14-16% that were guaranteed to the investor for ten years, and the supposed actual operation of the Bar Works business.
This left the program doomed, which it did in June 2017.
Moore went behind Haddow’s back to launch a competing coworking space investment program in the summer of 2016.
Our Space has sold projects in Dubai, Marbella, New York, Birmingham and Miami, and attracted $30 million in funding.
This decision led to a breakdown in the partnership between the co-conspirators.
Arrest in Morocco
Haddow, 51, fled to Morocco when the Bar Works scam came to light, but was arrested in Tangier and extradited to the United States in 2018, where he is in jail awaiting sentencing.
Federal prosecutors have asked a New York judge to consider the damage caused to investors by Moore’s deception as many lost savings.
“The respondent’s decision to join the program was not a one-time error or a passing error in judgment,” they said.
“Time and time again, Moore has made conscious choices to continue to facilitate fraud on countless individual victims and to cover up his fraud with lies and deceit.
“The defendant robbed hundreds of real people… [and] caused tens of millions of dollars in damage. His sentence should reflect the reality of the pain he caused.
Moore’s legal team disagreed with the $57 million restitution order and requested a reduction to $7.5 million – the amount invested by a group directly solicited by Moore.
Prosecutors said Moore should be held responsible for the total losses because he was inherently involved in the larger scam.
‘Jonathan Black’ pseudonym concealed convicted fraudster
Haddow’s name was omitted from all Bar Works Inc marketing material and replaced with the fictitious Jonathan Black to mask his involvement.
A fake LinkedIn page for Black added to a veil of authenticity.
Co-conspirator Savraj ‘Sam’ Gata-Aura was jailed for four years in 2020 for his role in the global scheme which offered investment units in Istanbul, New York, San Francisco and London.
Prosecutors estimated that Gata-Aura, 35, made $3 million from the scam, soliciting $10 million in funds from around 80 investors with fictitious claims about the company’s performance.
Rather than paying investors the promised monthly returns, Bar Works instead repaid previous investors from new deposits in a classic Ponzi scheme model.
US Attorney Geoffrey Berman said the gang would be held responsible for the “blizzard of lies” told to their victims.
According to the United States Securities and Exchange Commission (SEC), Moore received at least $1.5 million in commission for pushing Bar Works investments through a network of agents.
Haddow, 53, pleaded guilty on May 23, 2019, to one count of wire fraud and wire fraud conspiracy related to the Bar Works scheme.
Haddow also admitted one count of wire fraud and wire fraud conspiracy regarding a separate investment plan involving Bitcoins. Haddow’s sentencing is scheduled for April 8.
Haddow faces a maximum prison sentence of 40 years and is expected to be sentenced in April.
Dubai-based expat ‘cheated out of $50,000’
Several real estate agents in Dubai lured victims into the scam, who lost hundreds of thousands of dollars.
It is not believed that there have been any charges brought by the police at this stage.
One of the Emirati victims of Bar Works was South African Kevin Heard, who lost $50,000 after investing through an agent in Dubai, where he worked as a consultant in December 2016.
“I was introduced by an agent and invested in two co-working spaces in New York City,” said Mr. Heard, a father of two.
“I had been in Dubai for five years and was working hard with an idea to save money so we could move to the UK.
“The money was substantial and losing it caused quite a bit of friction in my marriage and contributed to our breakup.”
Mr Heard was promised a 25% raise after two years and was supposed to receive monthly interest payments, but that stopped after just a few months.
He tried to complain to the agent who sold the investment, but he had left the country.
The United States Attorney’s Office in New York said it was working to recover funds from Bar Works in a number of foreign jurisdictions.
Although a court order for the restitution of the millions lost by the victims is in place, the recovery of funds is not guaranteed.
Restitution payments depend on the defendant’s income and assets, with most victims of financial crimes receiving only partial restitution.
“The money the agents made from those sales should have been returned to us,” Mr Heard said.
“We were told that they had incurred the costs themselves and that they had worked for their money.
“But it had a huge impact on the families. It takes years of hard work to save that kind of money and puts a lot of stress and strain on relationships.
“For a while I thought I was dreaming and it wasn’t real. The reality is that the money is gone.
Updated: February 3, 2022, 7:09 a.m.