Hasan Suroor

LONDON: A high-flying British Indian businessman, Virendra Rastogi, on Friday began a nine-and-half-year jail sentence after being found guilty of defrauding some 20 banks across the Atlantic of more than £350 million in what was described as one of the biggest frauds in recent banking history.

The Southwark Crown Court here also jailed his associates, Anand Jain and Gautam Majumdar, for eight-and-half and seven-and-half years respectively.

Rastogi (39), who lived in style in London’s fashionable Mayfair area and had friends in high places, was hailed as one of the biggest success stories of British Indian enterprise and even featured in The Sunday Times’ famous Rich List as among the country’s wealthiest Asian businessmen.

But his charmed life came to a humiliating end when it was discovered that his international business empire comprised of a network of more than 300 fictitious companies whose supposedly high-value clients were fake. The supposed address of one such “client” in Muradabad, Uttar Pradesh, turned out to be a cowshed while the “head office” of another “client” in New Jersey, U.S., was a scrapbooks shop run by an old woman, the investigators found. Another American address was also found to be fictitious.

Rastogi and his associates ran their bogus operation from a fashionable address in Piccadilly, Central London, through a metal trading company RBG Resources. They got two peers, Labour’s Lord Cunningham and Liberal Democrats’ Lord Holmes, to become advisers to the company to give it respectability.

Fake documents

The fraud, which involved borrowing money from banks on the strength of fake business documents, was detected thanks to a simple fax error — by mistake an employee faxed some forged documents to a wrong address.

The recipient turned out to be the company’s auditors who became suspicious and raised the alarm, triggering a trans-Atlantic criminal investigation.

After a seven-year investigation and trial, Rastogi and his associates were convicted for running an “incestuous empire” of fictitious firms.

The judge called their actions a “crime of the utmost gravity” which had caused “enormous damage” to banks.