Inside the disappearing investment scheme with possible terrorism links

A licensed investment company allegedly scammed its customers out of their life savings — and now its CEO may have links to terrorism. It has sparked concerns about deep flaws in Australia's financial regulatory regime.Shirtless, adorned in reflective sunglasses and holding a pineapple, Karim Farag looks like an ordinary holiday goer.But the 32-year-old Egyptian has landed in a web of lies involving a suspected sham investment, ghost addresses leading to the Caribbean, a famous Australian cricketer and alleged links to terrorism. Karim Farag's smiling facade is at odds with what the ABC has uncovered about him.(Picture: Instagram)Karim Farag is the former chief executive of Main Group FX, a licensed investment firm in Australia that disappeared three years ago, leaving at least 13 investors collectively $2 million in the red.Now the ABC can reveal Mr Farag has alleged connections to an organisation accused of funding terrorism.Mr Farag maintains he has nothing to hide and is willing to cooperate with authorities.The 'euphoric' Sydney event that lured investorsIt all began at a four-star hotel in the heart of Sydney in 2023.As they enjoyed free food and cocktails, Main Group investors could never imagine that, by the end of the year, the company hosting the event would vanish, and their life savings along with it. The Sydney Central hotel where the event was held.(ABC News: Adam Wyatt) The slick corporate event Main Group held convinced some it was legitimate. (Supplied)Investor Jean Giles, a former public servant from Western Australia, thought she bonded with her account manager over a glass of red wine as he confided that his daughter had died in a hit-and-run in New York."The Sydney event was the clincher for me. I came away from there feeling quite euphoric," she said."I'd found something that was going to give my husband and I enough money to enjoy our retirement." Jean Giles attended the Sydney event.(Supplied)Main Group claimed to trade in futures and commodities, including oil and gold.Its headquarters were in Sydney, and it spruiked algorithmic trading software that allowed investors to "set and forget" their money.With monthly dividends and the ability to cash out at any time, users could start with as little as US$250.Ms Giles invested a small amount and, over several months, with moderate returns, was coaxed into giving away more to the tune of $176,000. Jean Giles lost money to Main Group FX.(ABC News: Ben Tessler) Jean Giles looks at her computer. (ABC News: Ben Tessler) Dean Butterworth and his partner attended the event.(Supplied)Also at the Sydney event was Melbourne truck driver Dean Butterworth, who eventually invested $217,000 from a workers' compensation payout he received after injuring his back.He was among an estimated 40 guests who met several Main Group FX staff flown in from the Cyprus head office to "put a face to the voice", as the event was advertised.It was to be the first and only time meeting Robin Mahfouz, the Australian director of Main Group FX, and account managers Oscar Allison and Alex Morrison. Mr Allison and Mr Morrison did not respond to requests for comment. The ABC is not suggesting they were aware of any wrongdoing. Oscar Allison, Robin Mahfouz and Alex Morrison.(Supplied)"Going to this event sort of made me feel comfortable knowing that we're meeting real people, it's not over the phone, it's not emails or anything like that," Mr Butterworth said. Adding to the appeal, cricket legend Shane Watson was spruiked as a potential special guest as Main Group's "Australian ambassador" but ended up being a no-show.The firm's enigmatic chief executive Mr Farag was quoted in a paid advertorial saying: "We are thrilled to partner with a world-class talent like Shane Watson!"Mr Watson had previously posed for the company in a photo shoot that included a Main Group FX-branded cricket bat and clothing. Shane Watson wearing Main Group FX-branded clothes.(Supplied) Shane Watson with a Main Group FX-branded cricket bat.(Supplied)"Being able to partner with Main Group FX, that's one of their incredible strengths, is educating people, educating traders and people who don't really know a lot about trading to be able to give them the best chance of success," Mr Watson said in the video. He told the ABC he cut ties with the group in November 2023, had no involvement in its management, and had tried to get the photos removed. The unravellingA few months after the lavish conference, investors said monthly dividends stopped, they could not withdraw their money, and all trace of Main Group FX disappeared.Main Group FX never entered administration or bankruptcy and the company is now deregistered, with customers no longer receiving returns and unable to recover their initial investment. It has essentially vanished, and there is no established way for investors to salvage their missing money. They now have to take matters into their own hands, with some pursuing action from police and regulators. "At the moment, financially, I'm barely holding it together. Bankruptcy is on the books," Mr Butterworth said. Dean Butterworth invested money he received from a workers' compensation payout.(ABC News: Darryl Torpy) Dean Butterworth, 58, does not expect to retire any time soon.(ABC News: Darryl Torpy)He was forced to return to work despite his back injury while Ms Giles sold her home."The axe fell and I realised that everything that we'd put in there, all the money I'd taken out of our mortgage, had gone," she said.So what is Main Group FX?Main Group FX boasted of its "Sydney headquarters", but the ABC found it was initially listed at a luxury residential address in the CBD. A month later, its address switched to an office-space-for-hire in Chatswood. Staff told the ABC they never saw anyone come in from Main Group. But the most interesting address for this investment was hidden deep in company documents: Suite 5 at the Griffith Corporate Centre, Kingstown in St Vincent and the Grenadines.The Caribbean location has previously been the subject of an ABC investigation, and the Australian and UK corporate regulators have issued multiple warnings about dozens of entities allegedly using this exact address as a base to perpetrate dubious online trading schemes. Even the identity of some of the directors of this company raises questions about its legitimacy.ASIC records show a 21-year-old international student was registered as Main Group's first director in February 2023.She told the ABC she had no idea her name had been used.Just a month later, the directorship changed to Australian-Lebanese citizen Robin Mahfouz, who was based in Cyprus at the time and attended the Sydney event.A man born in Moldova took over in January 2024 as the scheme was imploding.Company director claims she was a victimThe ABC was able to track down Main Group's registered director, Robin Mahfouz, who declined to comment.In an unsworn affidavit the ABC has obtained, as it was circulated among investors, Ms Mahfouz said she had no idea the company was potentially a scam and blamed her boss, Main Group's chief executive Karim Farag. Robin Mahfouz was listed as Main Group's director on ASIC paperwork.(Supplied)She alleged Mr Farag said she would be paid a higher salary if she allowed her name to be used on business registration documents.She also told customers her grandparents' address in western Sydney was used on official company records.Karim Farag's full name appears as "Karim Farag Mohamed Abdelhamid" on ASIC records where he is listed as a shareholder of Main Group.In March 2024, his name appeared somewhere else — somewhere that left customers horrified.Karim Farag's alleged links to terrorism Karim Farag Mohamed Abdelhamid is one of 599 names that appear on a list from the Israeli defence minister accused of having cryptocurrency accounts that may have funded a terrorist group.In 2024, Israel's National Bureau for Counter Terror Financing announced the seizure of cryptocurrency wallets it alleged were linked to an organisation called Dubai Company for Exchange, a group it said had provided "substantial assistance" to Hamas.Mr Farag's full name, birth date, and details of his Binance cryptocurrency account were included in the order.The Australian government has designated Hamas a terrorist organisation. The ABC has been investigating Karim Farag. (Supplied: LinkedIn)The Israeli government did not provide details on the value of the crypto seized, nor the value of each account or direct financial assistance by Mr Farag.Snir Levi, an Israeli expert in blockchain intelligence, told the ABC the names on the warrant were alleged to have provided support to terror financing by using the infrastructure of Dubai Company For Exchange.The US government has similar concerns. In July, the US Treasury Department also designated a group called El-Kahira for General Trading, another name for Dubai Company For Exchange, as a terrorist group.US authorities said El-Kahira provided "underground banking services" through money and cryptocurrency to known Sweden-based organised crime groups. It is not known whether Mr Farag knew of the company's links to Hamas, or what the extent of his involvement in the platform was. Possible terrorism links 'very concerning'Ken Gamble, the director of Australian intelligence firm IFW Global, has been investigating Karim Farag on behalf of some of Main Group's investors and was "pretty shocked" to discover the possible terrorism links."So the [Israel] government had published this list, and I immediately became very concerned," Mr Gamble said. Private investigator Ken Gamble has been looking into Karim Farag.(ABC News: Fletcher Yeung) Ken Gamble has been investigating Main Group FX.(ABC News: Fletcher Yeung)Speaking generally, he said: "It's not uncommon for terrorist groups to look at raising money through online investment fraud.""It's actually very clever because online investment fraud is a very low risk offence. It goes undetected mostly. And yet there's massive amounts of money that can be obtained."Dubai Company For ExchangeMore light has been shed on Dubai Company For Exchange's alleged potential links to terrorism following court action in the United States.In July this year, a group of Israelis who survived the October 7 attack filed a civil lawsuit against major cryptocurrency exchange Binance in the US District Court, accusing it of allowing terror financing on its platform.The untested court claim stated $US50.89 million ($72.8m) flowed between Binance and Dubai Company For Exchange-attributed wallets from 2022 onwards.Dubai Company For Exchange provided Hamas with cryptocurrency services, including the ability to convert crypto tokens into normal currency, the claim also stated.It added that the designated terror group allegedly held a large number of Binance accounts "to transfer funds intended for terrorism".In a statement, Binance said the claims were untrue and said it planned to file a motion to dismiss the case.The ABC contacted a defunct Facebook page linked to Dubai Company for Exchange but was unable to find any current contact details. A photo posted on the social media page linked to El-Kahira for General Trading, an alias of Dubai Company For Exchange, according to a sanctions list.(Facebook: elkahiramt) Binance had denied allegations it allowed terrorism financing on its platform.(Unsplash: Executium)Mr Farag declined an interview with the ABC and did not respond to detailed questions, but said he had nothing to hide. "If there is a legitimate legal matter concerning me, I am more than willing to cooperate directly with the appropriate police authority, court, regulator or other competent government authority through proper legal channels," he said.He said in a statement that he did not give permission for his details to be published and reserved his legal rights."To date, I have received no court order, summons, formal police notification, regulatory notice or other official legal communication requiring me to participate in an investigation or provide information concerning this matter," he wrote.