Tradex Ponzi Trial Starts in Tenerife Over €2.5M Fraud
The trial for the alleged Tradex Ponzi scheme, which defrauded over 120 victims of more than 2.5 million euros, begins this Wednesday in Santa Cruz de Tenerife, with main defendant Mukesh Daswani facing a 12-year prison sentence.
Over 120 people, including many business owners and private investors, are set to testify in court. They are victims of a scam that allegedly cost them more than 2.5 million euros. The trial, known as the Tradex case, will take place at the Provincial Court of Santa Cruz de Tenerife, starting this Wednesday and running until early January. The alleged perpetrators, Mukesh Daswani and Francisco Imobach P., are accused of running the scam from an office on Calle del Castillo in central Santa Cruz.
Daswani's former partner will also be in court. She is not accused of directly participating in the scam but is charged with benefiting from the stolen money.
Prosecutors are asking for a 12-year prison sentence for Daswani. He faces charges of aggravated fraud and obstruction of justice (for hiding assets). They are seeking a nine-year sentence for the second defendant. Daswani's former partner is being asked to repay over 327,000 euros. This money, which came from the scam, was spent on transfers, gifts, luxury trips, and hotel stays. All three defendants are also expected to return the total defrauded amount as civil compensation.
The scam operated like a classic Ponzi scheme. Investors were persuaded to put money into financial products, specifically the stock market, with promises of high returns – between 30% and 50% every two months. At first, some investors received these promised profits. They were then encouraged to reinvest their original capital, signing new contracts for similar high-yield products. However, these early payouts were made using money from new investors. This cycle continued until the scheme was exposed, the "house of cards" collapsed, and most victims lost all their money.
After the scam was uncovered, Daswani vanished from Tenerife, along with the invested money, which had been moved into various accounts and digital wallets. He was later arrested in the United Arab Emirates and deported. Upon his return to the island, he was questioned and has been held in custody ever since.