Indian on British rich list jailed for $700 mn fraud

June 6th, 2008 - 3:27 pm ICT by IANS  

By Dipankar De Sarkar
London, June 6 (IANS) An Indian-born business executive who made it to the Sunday Times Rich List has been jailed for nine-and-a-half years for a 700 million dollar global fraud through what was described as “an empire of imaginary metal” Virendra Rastogi’s two co-conspirators were also sentenced - “facilitator” Anand Jain was given an eight-and-a-half-year sentence and Gautam Majumdar, once a respected City banker, was jailed for seven-and-a-half years.

Passing the sentences Thursday, Judge James Wadsworth told Southwark Crown Court that the trio had caused banks in the US and Britain “enormous damage” by tricking them into funding non-existent deals in “a crime of the utmost gravity”.

The three were found guilty of creating a false database of 324 clients to persuade banks to advance them cash. Each loan was paid back by securing an even bigger loan.

The fraud was uncovered when false documents were inadvertently faxed to the firm’s auditors, PricewaterhouseCoopers in Romania, from a fake office in Hong Kong, prompting the auditors to resign and triggering a lengthy, 10 million pound investigation by the Serious Fraud Office.

Rastogi, who headed RBG Resources and was once placed on the Sunday Times Rich List, was also disqualified from acting as company director for 15 years. Jain and Majumdar were disqualified from acting as company directors for 10 years.

Paige Rumble, the lead SFO investigator on the case, said: “This was a truly audacious and ruthlessly efficient fraud that ranged from the poorest areas of India to the corporate tower blocks of Manhattan.”

She added: “The RBG Resources empire was a family business founded and driven by fraud.”

The SFO said that a number of genuine metal traders were employed by RBG at its offices in central London who entered into real transactions but were not aware that the business was being used as a front for a massive fraud operation.

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