It was to be twice the size of Hong Kong Island and house more than 1.5 million people. Fellow Australian Matt Joyce was the project's boss.

Then the bubble burst. Thanks to the GFC, Dubai's dazzling economic mirage evaporated. Within months, Lee and Joyce were thrown in jail, accused of a fraud against Dubai's Nakheel and Australia's Sunland Group over so-called "development rights" by a company called Prudentia. They would lose their liberty for almost five years, with nine months of it spent behind bars.

MARCUS: Sunday, January 25, 2009, started out as a normal day, the beginning of our working week. Matt was in the offices that morning and I briefly said hi. The auditors were also in and I saw Matt going in and out of their office throughout the morning, along with some of the people who worked in the legal department and customer relations. I called Julie in Sydney, where she had travelled to celebrate her mother Bet's 80th birthday the next day, Australia Day.

About 10am Matt said he had to race off. He looked flustered and muttered something about the police having called him about a car lease. I guessed there was some kind of administrative hitch. A while later I was called into the auditors' office. A man introduced himself simply as Mohammed. Pointing to some plans of Dubai Waterfront land plots, he asked me about plot D17. I said D17 had been sold to Sunland, an Australian company, in 2007, and that I had prepared a business case, which had then been approved by the Nakheel board.

I tried calling Matt on his mobile, but it rang out. I sent a text, but an hour later I still hadn't received a reply. About 2pm, I received a phone call asking me to attend the police station. I told both my assistant and Matt's where I was going; both said, "It will be nothing." I also called Julie in Australia and told her if I hadn't called her back within four hours, something might be wrong.

At police headquarters, an Emirati man led me into a small office. He left, locking the door behind him. Finally two different Emiratis in national dress entered the room. They didn't identify themselves, but pulled two chairs up close to mine. "Do you know why you are here?" the older one asked. When I answered "No", he shot his partner a look that made it clear he thought I was lying.

He continued, "Do you know David Brown?"

"Yes," I said, "his company purchased some land from Dubai Waterfront, where I work." Brown was Sunland's chief operating officer for the Middle East.

"Do you know Angus Reed?" he said.

"No, I don't," I replied, but before I'd finished speaking he snapped, "You're lying." I had heard both Matt Joyce and Nakheel lawyer Anthony Brearley mention Reed on a couple of occasions, and Brown had done the same, but I had never met him or even spoken to him. "I've heard of him, but no, I don't know him." The officer raised his voice. "You're lying. You do know him, don't you?"

I said again, "No, I don't," adding, "Why am I here?"

He said, "Your name has been mentioned a lot."

Later they returned with another three men. "What do you know about commissions being paid?" the senior one asked. "I don't know anything about commissions," I said. He grew angrier. "You're lying. David Brown has paid you commissions."

I asked for a lawyer. "Not needed," was the response.

They left but all returned again. I said I believed Sunland had bought D17 from Nakheel but had also paid a premium to another Australian company, Prudentia. This was Angus Reed's company. "Sunland paid a commission," said the officer.

"No," I answered. "As I understand it, it was a premium because the other group had some kind of option or right to the plot." I explained that I didn't know any more about it because I wasn't involved in the transaction. And any other arrangements Sunland made were its private affair. Becoming more aggressive, the officer claimed Angus Reed was my best friend. He wanted to know how much money David Brown had given me. "Where is the money now?" he demanded.

"What money?" I asked. "He's not my best friend. I don't even know him."

The interrogators came back with printed pages, all in Arabic. They said they were a record of the interview and told me to sign them. "I can't sign this," I said. "I don't know what it says."

They said, "You must." I saw that one of them was holding another document and I could see Matt's signature on it. Worried that their hostility might turn physical, I wrote, "I cannot read or write Arabic, I am told this is what I said" on the document, then signed my name. One of the men handed me my BlackBerry and demanded contact details.

Making it look like I was searching through my contacts, I quickly typed a text to Julie: "better get here". It would be the early hours of the morning, Sydney time. As I was reading out a phone number a reply came from Julie: "what me to DXB" [Dubai airport]. I had only enough time to type "Y" and hit send.

JULIE: About 6am my time, I got a call from Marcus. He said, "I'm with these nice gentlemen here..." in this awful, tight voice that I knew meant they weren't nice. "They're asking me some questions about a property deal," he said. He sounded angry, but also scared.

That night, Lee was taken to prison and placed alone in a cold concrete cell, about 2.5 metres by 1.5 metres.

MARCUS: Sitting on the bed, ears straining for any signs of life, I made out the sound of someone talking. It sounded like Matt Joyce.

I asked if I could make a phone call, saying my wife would be worried.

"Not allowed," said a guard, slamming the door behind him. I had dropped off the face of the earth.

People can't just disappear, I tried to tell myself. But maybe in Dubai you could.

JULIE: I spoke to Matt Joyce's wife, Ange. She said she had a number for Sultan Ahmed bin Sulayem, the chairman of Dubai World, Nakheel's parent company, and she would call him to try to get information. She seemed just as mystified as I was.

MARCUS: On the night of January 28, Matt and I were put in the back of a blacked-out 4WD. We started to ask each other questions when one of the Emiratis said, "No talking." Speaking in a low murmur, I said I was totally confused. Matt dropped a bombshell. He said, "I helped this company open up a trust account." I said, "What? Which company?" He said, "I helped Prudentia to open up an escrow account, because they couldn't open up a bank account in Dubai."

This would become the crux of the case. About $7 million had landed in Joyce's account in the tax haven of Jersey in the Channel Islands. It was exactly half of a fee that Sunland had paid to Prudentia to walk away from D17. This payment cleared the way for Sunland to buy the plot directly from Nakheel for about $60 million. Prosecutors initially suspected the Sunland payment was a bribe, but they would soon regard the company as the victim. And Sunland would allege that Joyce, Reed, Lee and Brearley tricked it into believing Prudentia had rights over D17.

Reed and Brearley were back in Australia. Joyce and Lee would spend the next seven weeks in solitary confinement, without charge. Lee would become gravely ill and shed more than 14 kilograms.

MARCUS: I was locked in 24 hours a day with no chance to walk, no fresh air, no warmth and no human contact. Not being allowed to go to the toilet became a major obsession. The cruellest guards thought it was funny to torture people this way.

Soon I was allowed to make 10-minute calls on Saturdays, Tuesdays and Thursdays, only to Julie. The maximum 30 minutes they added up to were the only times all week I communicated with anyone.

One of the guards' favourite tricks was to bang on cell doors in the middle of the night, making wild accusations or threats.

"You've been telling your wife lies about us beating you, haven't you? You've been telling the consulate lies, haven't you? Do you want to be sent to Central Prison with the rapists and murderers?"

They would threaten to cut off the phone calls and weekly visits. That sent stabs of fear through me: Julie was my lifeline. On one visit she brought in a booklet from the Australian consulate. The guards always checked the things she gave me to make sure no papers were hidden inside, but as she handed it to me she said, "Make sure you read it." It was handwritten poem from her that ended with the line, I am always with you.

JULIE: Marcus was going downhill so fast I truly thought he would die if we didn't get him out of solitary. On the Monday of the fifth week I went in and it was awful just to look at him. He has beautiful blue eyes, but I looked into his face and his irises were a horrible dark colour, almost black. When I put my hands on his hips I could feel the bones sticking out. When I got home I lost it. I screamed and sat on the floor and sobbed.

At the start of week eight, Lee and Joyce were moved - handcuffed together at one point - to Port Rashid Jail, where they joined 200 prisoners vying for food and bunks that were only sufficient for 90 men.

MARCUS: My skin crawled as I heard one prisoner yell, "New white meat". The officers let me keep my watch and my wallet, saying: "You will need faloos in there [money for the prison black market]."

I worked out sleeping arrangements, paying for a bunk for Matt, who seemed to be melting down. Most of the other westerners were in for drink-driving. There was nothing separating the people picked up for an expired visa and the rapists and murderers. One group of 13 young Indian Sikhs was known as "the serial killers" (technically they were mass killers, but fine distinctions vanished in the circumstances).

Every day was marked by violence. Once while I was on the phone to Julie, a fight started between an Emirati drug trafficker and an Iranian on immigration charges. It spilled out into the corridor where dozens of others joined in. I was knocked to the floor by the brawlers. They were ripping pipes off the walls to use as weapons. The Emirati was out to kill. He smashed a steel ladle against the screaming man's skull. There was blood everywhere.

There was sexual violence, too. The predators seemed to target small, younger men, particularly Filipinos, Vietnamese and others less able to defend themselves. At times we could hear the screams.

JULIE: Ange was trying to pull strings with some high-profile connections back in Australia. She and Melbourne lawyer Martin Amad focused on Alexander Downer, the former foreign minister. After the Howard government's defeat, Downer had gone into partnership in a consultancy called Bespoke Approach, offering "discreet, strategic, corporate and political advice" for those who can afford it. For a fee, I was told, Downer would get involved on behalf of Matt and Marcus.

Bespoke agreed to contact Mohammed bin Zayed bin Al Nahyan, Crown Prince of neighbouring Abu Dhabi and brother of the UAE President, and ask for his assistance in securing bail. The cost would be $60,000. When I made it clear that there was no way I could afford half, Ange gave me the clear impression that the Joyces would foot the initial outlay.

Martin tried to argue for a "success fee", dependent on bail being granted as a direct result of the Sheikh's intervention. Downer's partner in the agency, Ian Smith, wasn't having that. The fee would be charged when bail was granted, with no onus on Bespoke to prove it had been a result of their actions.

In an April 27 letter to the Sheikh, Downer raised only the possibility of Matt Joyce's release. There was no mention of Marcus. When Downer was asked about this in a Foreign Correspondent interview in 2014, he said, "I just simply wasn't approached about him, so I simply don't know about his case."

MARCUS: In early May 2009, my Dubai lawyer, Ali Al Shamsi, came from a meeting with fabulous news: the prosecutor had given him the "green light" to get bail for me on the basis that I had no involvement with the case. It still needed the approval of another branch of the judicial system, the Technical Office.

But two days later, about 30 of us, including me, Matt and the "serial killers", were cuffed, loaded into a prison bus and transferred to Central Prison. As in Port Rashid, there was a constant threat of violence.

Soon the Technical Office rejected my bail. While phone calls were not allowed on weekends, I felt I had to risk it. Hearing Julie's voice and having her tell me she loved me was enough to keep me going. I watched the CCTV cameras; they swept past the area where the phones were every 60 seconds. That was just long enough to duck in, call, say I love you and hear it back, then get out before the camera returned.

JULIE: Marcus didn't tell me he was risking solitary with these calls - that would have completely freaked me out - but I did know he was breaking the rules. I couldn't help but melt at the thought he was taking this risk just to talk to me, the wonderful, crazy man!

MARCUS: In early June, the Attorney-General refused my bail application, even when the prosecutor - and by now the Technical Office - had agreed to it. Months later we learned the reason why. It was Sunland's submission of a memorandum from its lawyer Ron Eames. It did not detail what I was supposed to have done, but the "Eames memorandum" said I would be liable for prosecution in Australia for deceptive or misleading conduct under the Trade Practices Act, along with Angus Reed, Matt Joyce and possibly Anthony Brearley. The Dubai Public Prosecution department regarded this memo as so damning they refused me bail. I believe it should have disclosed that Eames was also a director of Sunland.

Matt and I were not speaking to each other much at all by now - he'd closed in on himself - and I was angry that there were things he had kept from me early on.

After almost six months in prison, Lee and Joyce were finally charged with fraud-related offences.

When I got the English translation I read for the first time David Brown's January 21 statement to the police - the one accusing me and the others of having tricked Sunland into paying us money. I was dumbfounded.

Also in the files were comments from the Dubai Ruler's Court "experts". They were breathtaking: "There is no evidence that the third defendant [Marcus Lee] received any money, but he must have."

Julie read a Fairfax Media story to me over the phone. It described Angus Reed as being "well-known in property circles, including as adviser to the Nauru government in the 1990s when it lost a fortune on the Melbourne property market." But the bit I had Julie read over again was the description of Matt and Reed as classmates at Geelong Grammar. This, after Matt had repeatedly told me he hardly knew Reed. It took me a day to calm down enough to ask Matt if it was true.

"No, no," he said. "They have it wrong. It was Brearley who went to school with him, not me." (I never found any evidence that Brearley had gone to school with Reed.) Nor did Matt tell me that in January 2006 he had signed an agreement to provide consultancy advice for Reed's company in Australasia and the Middle East.

On September 9, 2009, a story about the Lees appeared in The Sydney Morning Herald under the headline, "Truth will prevail, says jailed executive's wife."

Julie read it out to me when I called that evening. Matt was also on the phone and Ange read him the story. He hung up, barged into my phone cubicle and shouted, "Why didn't Julie get Ange's sign-off and approval before you did the story? Why weren't Ange and I consulted before you issued a press release? Ange is beside herself," and then stormed off.

I quickly said goodbye to Julie and went to ask Matt what his problem was. He said, "The only reason I'm not going to beat the shit out of you is that I don't want another case against me." I was speechless. I pointed out that it wasn't a press release; Julie and our Australian lawyer John Sneddon had answered questions put to them. "What they said was largely in relation to my father and his illness and the possibility that I won't even see him again, something that's very personal to me." He just gave me a death stare. Eventually he spat out, "You'll get what's coming."

Sunland's civil action against Joyce, Reed and Prudentia failed in the Victorian Supreme Court and again on appeal. The judges branded David Brown and Sunland's chief executive officer, Soheil Abedian, as unreliable witnesses. Sunland would declare in an April 2012 letter to Lee's legal team, though not sent directly to the Dubai prosecution, that it made no claims against Lee. It was too little, too late, says Lee. In December 2008, the month before his arrest, Joyce returned the money held in trust in his Jersey account to Prudentia. While he and Lee were released on bail in October 2009, they would spend another four years under house arrest, fighting to prove their innocence. Lee was acquitted in May 2013.

On the same day, Joyce was convicted and sentenced to 10 years' jail and received a $25 million fine. Reed, tried in absentia, received the same sentence. Joyce appealed and was finally found not guilty in November 2013, when Lee also defeated a prosecution appeal against his acquittal. Both men would be free to go home at last.

MARCUS: Whatever Reed and Matt did with the money once it had been paid is one story. But to be clear, the only reason I lost five years of my life is because David Brown included my name among a group he claimed had deliberately misled him at Nakheel. There were no other witnesses, no corroborating evidence, just a false accusation made, in my view, to save his own skin. As the findings of the Court of Appeal in Victoria put it, "the evidence was replete with instances of conduct by Brown, Abedian and Sunland, which was consistent with a motivation of ulterior purpose." They sat back while I suffered the dreadful consequences over five years.

Edited extract from Trapped by Marcus and Julia Lee, published by ABC Books this week.