rediff.com: Four Indian metal traders charged in international bank scam

Four Indian metal traders have been arrested on charges of defrauding banks worldwide of an estimated $1 billion by obtaining financing for sham transactions and then pledging them as collateral for loans in what officials describe as a scam of "astonishing" proportions.

They were identified as Narendra Kumar Rastogi, 47, Anil Anand, 39, Manoj Nijhawan, 43, and Udhay Shankar, 27, all residents of New Jersey.

If convicted on charges of conspiracy to commit bank fraud, mail fraud and wire fraud, each could face a maximum of five years in prison and fines of more than $250,000.

According to prosecutors, they claimed their companies were brokers to non-ferrous metal suppliers and buyers and they arranged financing for purchases involving parties in India, Hong Kong, Singapore and United Arab Emirates.

The defendants, arrested on Tuesday, raised "deceit and misrepresentation to an art form," said acting agent in charge of the Federal Bureau Investigation Jim Sheehan.

He likened the alleged fraud to "breaking into bank vaults and hauling off bags of cash."

Investigators charged that the four carried out the scam since at least May 2000 through a group of companies in Piscataway in New Jersey and in London. The companies involved included Allied Deals Inc, Hampton Lane Inc and Sai Commodity Inc.

The investigators said the London-based brother of Rastogi, Virendra Rastogi, took part in the scheme but was not charged.

Prosecutors said the defendants along with other co-conspirators stole hundreds of millions of dollars in loan proceeds from banks in the United States, Europe and Asia including JP Morgan Chase and Co, Fleet Bank, Dresdner Bank Lateinamerika AG and China Trust Bank.

The men, they charged, fabricated collateral and misrepresented the existence of underlying business transaction to steal the money.

US Attorney James B Comey said the scam was unearthed when an alert employee of the J P Morgan Chase Bank decided to walk to the office of a company called Island Metals, which had received $1.2 million of the bank's money.

What the employee found was a "nondescript Manhattan office building, a door with a peephole in it and a tiny little sign that said Island Metals," he said.

Prosecutors allege that the defendants were falsely conveying to banks that they were investing money to pay metal suppliers when they were actually wiring loans they got to their own bank accounts.

They said the companies generally provided the banks with security interest in the assets but the four allegedly began fabricating collateral and misrepresenting business deals as part of a scheme to steal million of dollars.



Home > Money > PTI > Report May 15, 2002 \| 1220 IST		Feedback