Businessman admits 'ponzi' fraud (From Asian Image)

Businessman admits 'ponzi' fraud

3:38pm Monday 30th January 2012 in News

A businessman accused of masterminding a multimillion-pound “Ponzi” scheme has admitted a string of offences.

Kautilya Nandan Pruthi’s victims were persuaded to invest in an apparently high-yield fund but the money was siphoned off to fuel his lavish lifestyle.

Trading as Business Consulting International, the 41-year-old ran the business fraudulently between 2005 and 2008, obtaining £38 million from the swindle, prosecutors said.

The scam was said to be the biggest Ponzi fraud ever perpetrated in the UK.

If every victim was paid back what they were due, it would amount to a sum of £100 million.

Pruthi pleaded guilty at Southwark Crown Court in London to four specimen counts of obtaining money transfers by deception, one count of participating in a fraudulent business, one count of unauthorised regulated activity and one count of converting and removing criminal property, a court official said.

No evidence was offered on a charge of using criminal property and he was acquitted of it.

Adjourning sentencing to a later date, Judge Michael Gledhill QC warned Pruthi a jail term would be “inevitable”.

He said: “As you well know these are most serious offences.”

Two other men, John Anderson, 46, and Kenneth Peacock, 43, are accused of one count each of recklessly making a misleading, false or deceptive promise, fraud and unauthorised regulated activity.

They deny any wrongdoing and will stand trial at the same court this week.

Ponzi schemes are a type of investment fraud that involves the payment of purported returns to existing investors from funds contributed by new investors.