Judge rules Iraqi charged with investor fraud poses flight risk
Former Dearborn man allegedly bilked locals out of millions
The ruling came after Alabadi’s lawyer Andrew Wise argued that his client should be released from the Wayne County Jail, and placed in the custody of his cousin who lives in Cleveland, Ohio. The cousin was present at the hearing, and appeared before the judge to answer questions.
In court U.S. Assistant Attorney Louis Gabel who’s prosecuting the case said because Alabadi faces incarceration the risk of him fleeing the country is greater.
“I don’t have confidence of his cousin ever assuring his appearance in court,” Majzoub said. On Feb. 3 Alabadi, a 44-year-old citizen of Iraq was arrested at the Detroit Metropolitan Wayne County Airport. He was arrested on an indictment of bank fraud, attempted bank fraud and money laundering.
The indictment alleges Alabadi solicited investments from individuals many of Iraqi descent, by promising that the funds would be used to rebuild his war torn country. Alabadi promised large returns for the investments, but never used the money for new projects in Iraq, and instead operated a Ponzi scheme by using money from subsequent investors to pay earlier investors.
He quickly left to the Middle East as investors began catching on. Many of those who were taken advantage of reside in Dearborn where there is a large Iraqi American presence. Gabel says Alabadi has refused to provide information on the case.
“What we had at essence is a classic Ponzi scheme,” said Gabel. The indictment against Alabadi is not sufficient proof he’s guilty, and it’s now in the hands of the U.S. government to find him guilty without reasonable doubt.
Judge Majzoub cited Alabadi’s past failures to appear for depositions as a reason to keep him detained. Alabadi is facing a $170 million civil judgment against him. Attorney David Honigman is representing about 200 clients in that suit.
According to reports some investors lost between $15,000 to $5.9 million each. A majority of the investors used cash.
If anyone believes that he or she was a victim of Alabadi’s fraud they should contact Special Agent Philip Reed of the FBI at 313.965.2323.