A non-resident Indian businessman and two British accomplices have been arrested for duping over 600 people, to the tune of £80 million in a ponzi scam.
A non-resident Indian businessman and two British accomplices have been arrested for duping over 600 people, including celebrities like former cricketer Darren Gough and singer Jerome Flynn, to the tune of £80 million in a ponzi scam.
The scheme’s mastermind, Chelsea-based Indian entrepreneur Nandan Pruthi, and business partners Kenneth Peacock and John Anderson, were arrested after raids by the London police, the
Observer reported on Sunday.
The UK’s financial services authority has frozen Pruthi’s assets. Sports cars, jewellery and £250,000 in cash are among assets recovered from Pruthi and his colleagues, though their value is less than £2 million. The scheme money may have been salted away in Dubai, the Cayman Islands or Thailand.
Besides former England cricketer Gough and singer Flynn, actress Francis de la Tour is among the victims, as is a 1960s pop singer.
Cricketer Kevin Pietersen confirmed that he was approached by the suspected fraudsters but decided not to hand over his money.
Several people are pursuing civil claims against Pruthi for the return of their money. Some victims have been made bankrupt, lost homes or even attempted suicide, police said.
Pruthi claimed he has instructed his bank to make payments to investors, but they have been blocked by the freeze order. Police, however, believe his protestations are unsustainable, as the money is not there.
Behind the facade of token investments, Pruthi and his partners are believed to have recycled millions of pounds from new investors on to existing ones, to maintain the illusion of a successful investment strategy generating huge returns. Much of the cash is thought to have been churned through accounts with HSBC.
Monthly payback rates of 8 to 13% were said to be available to those making ‘loan’ investments with the trio. Marketing material for Pruthi’s Business Consulting International suggested money was invested as venture capital in small or struggling businesses.
Some victims said they believed their ‘investments’ were deployed in overseas bond trades or in highly lucrative vulture fund operations — all of it on the promise of get-rich-quick returns.
Police believe most of the cash was churched among Pruthi’s victims, as in the classic ponzi scheme — named after US fraudster Charles Ponzi.
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