Metals magnate 'the brains behind' €430m global scam
FOR six years Virendra Rastogi posed as the highly successful and respectable chief executive of a multibillion-pound metal trading company.
His home was in London's Mayfair, a short chauffeur-driven trip from his offices in Piccadilly, his children were at private school and his customers were dotted around the world.
But all was not quite as it appeared. The business, backed by banks in Britain and the United States, was "propped up by dishonesty", the customers were Rastogi's accomplices and his customers' addresses included a New Jersey launderette and a cowshed in India.
Southwark Crown Court, in south London, heard how Rastogi engineered the scam, taking fraudulent loans that eventually cost the banking industry an estimated £343.3m (€431.4m).
The financial institutions thought they were underwriting a hugely profitable business, so much so that Rastogi, a married father of two, appeared in The Sunday Times Rich List. To add to his veneer of respectability Rastogi tricked an MP, Jack Cunningham, and three peers into becoming advisers or non-executive directors of his firm, RBG Resources plc. He also hired PricewaterhouseCoopers (PwC) as his auditor in Britain.
The whole operation unravelled after an aide in Hong Kong, intending to send false letters from various "customers" to Rastogi, pressed the wrong button on a fax machine and sent all the material to PwC.
When officers from the Serious Fraud Office swooped in 2002, they caught Rastogi stuffing papers into his shredder. It was, the court heard, a "desperate last-ditch attempt" to destroy incriminating documents and distance himself from deceit spanning six years and three continents.
Rastogi's paid lieutenants were based in America, Hong Kong, Singapore, Dubai, India, France and Italy.
One investigator traced a customer address to a New Jersey housing estate and a bemused pensioner who sold scrapbooks. When investigators phoned some of the firms the phones were answered by children.
To obtain money, Rastogi invented metal deals with customers abroad. As it would often take months to ship the metal and he would not be paid until it arrived, he persuaded the banks to pay the fee, to be repaid when he got his money. Since there were no real customers he would invent another "deal" and carry on.
A fraud investigator said that most of the money was thought to have been sent back to India.
Rastogi was sentenced yesterday to nine and a half years' jail. His "right-hand man", Anand Jain (42), of North Finchley, London, was jailed for eight and a half years and the other "financial adviser", Guantam Majumdar (55), of Madras,, was given seven and a half years.
All three were convicted of one count of conspiracy to defraud between January 1996 and June 2002.
Judge James Wadsworth told Rastogi: "I am of the view that you were the real brains of the extension of the business by these fraudulent means ... the banks were induced by your falsehoods to advance billions of dollars for trades that did not exist in any real sense."
Paige Rumble, the lead investigator, 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." (© The Times, London)
- Adam Fresco in London
