Rhian Nicholson Hundreds of investors have been left nursing heavy losses in what is suspected to be the UK's biggest Ponzi scheme. Investors lose £80m in UK 'Ponzi' scheme
20.07.09 10:15
Around 600 investors, including sports stars and celebrities, put around £80 million into Knightsbridge-based Business Consulting International (BCI).
The company promised returns of between 6% and 13% a month if people invested their cash for up to four years.
However, the scheme, which had been running since 2007, unravelled when it failed to make payments and the authorities were alerted. A number of the duped investors have now been left bankrupt, homeless and even suicidal following its collapse.
The alleged perpetrators of the Madoff-style scam said it made its money through lending to troubled companies at high rates of interest. But City of London Police suspect that older investors were paid off with money from their original cash.
Close network
Investors were introduced to the scheme by family members, friends and business acquaintances they met in sports clubs and upmarket bars in London's West End. Many are now having trouble accepting they have been hoaxed and are unlikely to see their money again.
Detective Superintendent Bob Wishart of the City of London fraud squad said: 'These victims have been totally hoodwinked. They have been befriended and groomed by the bad guys. They think these people are friends and they have placed complete trust and given over a lot of personal information and it is very difficult to break that link of trust.
'Consequently we get this situation where we find they do not believe us. That is the power of the fraudster. Even though people have been arrested and we have searched their homes and offices and closed them down, the victims still do not believe anything is wrong.'
As the scheme was not regulated by the Financial Services Authority, those that have lost money are not eligible for compensation.
Three arrested
BCI director, Kautilya Nandan Pruthi, 38, from Knightsbridge and financial consultants Kenneth Peacock, 40, and John Anderson, 43, both from Virginia Water, Surrey, have been arrested in connection with the alleged fraud.
The trio has been questioned on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation and are on police bail.
Last week officers seized eight luxury cars worth £800,000 from a West Sussex dealership as part of the investigation. They have recovered other assets worth about £1 million, including jewellery and watches, and £250,000 cash.
They are also trying to trace offshore accounts in Dubai, the Cayman Islands and Thailand.
Last month fraudster Bernard Madoff was sentenced to 150 years in jail for his $65 billion Ponzi scheme.
Monday, 20 July 2009
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