Trio led by Indian arrested in 80 million pounds scam in UK

H S Rao
London, Aug 2 (PTI) An NRI businessman and two of his
British accomplices have been arrested here on charges of
duping over 600 people, including celebrities like former
cricketer Darren Gough and singer Jerome Flynn, to the tune of
80 million pounds in a 'Ponzi' scam.

The mastermind of the scheme Chelsea-based Indian
entrepreneur Nandan Pruthi and his business partners Kenneth
Peacock and John Anderson were arrested after a series of
raids conducted by the London police in the city, the Observer
newspaper reported Sunday.

The Financial Services Authority has frozen assets of
Pruthi. Sports cars, jewellery and 250,000 pound in cash are
among assets police and the FSA have managed to recover from
Pruthi and his colleagues, though their value is less than two
million pound.

There has been some speculation that money may have been
salted away in Dubai, the Cayman islands or Thailand.
Former England cricketer Darren Gough, Rising Damp actress
Francis de la Tour and singer Jerome Flynn are among the
victims of the scam. A 1960s pop singer, as yet unnamed, is
also among the victims while cricketer Kevin Pietersen has
confirmed that he was approached by the suspected fraudsters
but he decided not to hand over any of his money.

Several people are pursuing civil claims against Pruthi
for the return of their money. Pruthi has filed a defence
claiming he has instructed his bank to make payments to
investors but they have been blocked by the freezing order.

Police, however, believe his protestations are
unsustainable. The money simply 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 in order 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 between 8 per cent and 13 per
cent 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 vast majority of cash was churched among
Pruthi's victims in the manner of a classic 'Ponzi scheme' -
named after US fraudster Charles Ponzi.

Scores of seasoned entrepreneurs and professionals were
among those duped by Pruthi, Peacock and Anderson. Many of
them were groomed through entrepreneurial networking groups
and sporting clubs frequented by the men who all worked out of
the same three-room headquarters on Relton Mews in Knights
bridge.

Some of the victims have been made bankrupt, lost homes
or even attempted suicide, police said. PTI HSR
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