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Indian entrepreneur Rastogi turns out to be big fraud
WSN Network

LONDON: A top shot Indian origin entrepreneur, Virendra Rastogi who was listed at one time as one of the richest people in Britain and was projected as a role model, will spend some nine-and-a-half year in jail: he ran the a huge and lond drawn frauds in banking history.

His two accomplices, Anand Jain and Gautam Majumdar, have got prison terms totaling 16 years, for the £350 million fraud that involved swindling money from banks in US and UK.

Rastogi followed a rather simple way to defraud the bank. He used to build a hype around his metal trading company RBG Resources by getting famous politicians as advisers, and running an empire of 324 fictitious firms with whom he would show he had cut deals. The address of one of the firms was later traced to a launderette, another to the home of a woman who sold scrapbooks, and the third to a cow shed in Moradabad.

What Rastogi would do is first take a loan from a bank in the name of RBG, which had claimed £1 billon turnover in 2001. To repay this loan, he would take a bigger loan from another bank and pocket the difference. During the trial at Southwark Crown Court, prosecutors said it was a fraud of massive proportions, which "raised deceit and misrepresentation to an art form". Luck ran out for Rastogi in 2002, a year after he was placed 207 in Sunday Times Rich List with £150m assets, when one of his employees by mistake sent fax to the wrong office.

An employee at the Bucharest office of accountants PricewaterhouseCoopers, which was till then RBG's auditor, received the fax and found that six different companies in Europe and Asia, had sent eight letters - all to RBG in London -from the same fax machine in Hong Kong.

This soon led to a raid at Rastogi's place and six years of investigations.

11 June, 2008
 

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