Man accused of running £115m scam that duped celebrities

Kautilya Nandan Pruthi, 39, was charged yesterday with 30 fraud offences, including running a bogus business, money laundering and obtaining money by deception.

He was questioned by City of London Police detectives investigating a gang suspected of cheating at least 600 people around the world.

People were allegedly persuaded to invest in an apparently high-yield fund, but the money was siphoned off to fuel the lavish lifestyles of those behind it.

Victims are believed to include a 1960s pop star, a household name from television and the cricketer and Strictly Come Dancing champion Darren Gough.

The swindle is said to be one of the biggest Ponzi frauds yet detected in Britain. Ponzi frauds involve using money from the first investors to pay dividends to others to trick them into handing over their money.

The vast bulk of the money disappears overseas or is used to fund the lavish lifestyles of a small number of people behind the conspiracy.

The Crown Prosecution Service said Pruthi will appear on bail at City of London Magistrates' Court on September 3.

He is accused of participating in a fraudulent business, fraud, obtaining money by deception, unauthorised regulated activity and hiding criminal property.

They relate to Pruthi's activities from his base in Knightsbridge, central London, between August 2005 and June 2009.

The investigation focuses on finance firm Business Consulting International (BCI) and several companies linked to it.

Police believe a gang of men ran a fraudulent and unregulated investment scheme offering returns of between six and 13 per cent a month for up to four years.

Clients were told the money was loaned to "distressed" companies which needed short-term cash and were willing to pay for it. But it began to unravel when some payments were missed and people alerted the financial authorities to their suspicions.

The Financial Services Authority has obtained a judgment in the High Court requiring Pruthi and others to pay back 115m.

Several victims have already lost their homes, others have been declared bankrupt and some have attempted suicide.

Officers are in a desperate race to track down the missing money in offshore accounts.

They have seized assets worth about 1m, including an 800,000 stable of eight prestige cars including a Lamborghini, Ferraris and Bentleys.

Last year Wall Street broker Bernard Madoff was jailed for 150 years for orchestrating a 39.5bn Ponzi scheme in the US.