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UK fraud: Indian-origin HSBC staff jailed

July 08, 2008 12:59 IST

An NRI bank clerk was sentenced to nine years in prison for trying to defraud his employer HSBC with a sum of about 72 million pounds ($141 million), in 'one of the biggest frauds of its kind'.

Twenty five year-old Jagmeet Channa, who worked at the Canary Wharf headquarters of the bank, hijacked his colleagues' identities to plunder the coffers of the bank.

Hoping the looming weekend would help hide his betrayal, Channa followed orders of fellow conspirators who had promised him a 'cut', by first sending Euro60 million (47,970,227 pounds) from one of its trading accounts to Morocco.

Channa, who wired Euro30 million (23,984,113 pounds) to a branch of Barclays in Manchester, forgot that the account he raided had to show a zero balance at the end of each day.

The Essex-based employee, who had been working at the bank for a year, admitted one count of conspiracy to defraud between April 1 and 18 this year and one of money laundering by sending the larger sum to the Western Saharan state.

A third count, alleging abuse of a position of trust, was 'left on the file' and not proceeded with.

"Huge sums of money were involved. These speak for themselves," the since-sacked finance desk clerk was told by Judge Geoffrey Rivlin QC in Southwark Crown Court.

"This was no silly prank. This was a carefully planned and very serious attempt to transfer a fortune in money away, and it almost succeeded," the judge said.

"Others were involved, perhaps several others, and in the absence of any explanation from you I must assume this was a planned and sophisticated criminal enterprise," he added.

The convict's confession, age, remorse, and the fact he had not made a penny from his dishonesty, were among the few other things in his favour, the judge ruled, adding 'theĀ evidence against you is quite overwhelming'.

The massive debit was first discovered by HSBC workers in Malaysia on a Sunday. They alerted their colleagues in London and an investigation was launched immediately.

Electronic footsteps on the bank's mainframe initially pointed the finger of suspicion at Channa's two colleagues, whose passwords had been used to carry out and approve the transactions.

They were arrested, questioned and after 'convincing denials' were declared innocent.

Shortly afterwards, security camera checks and other inquiries identified Channa. But by then both Barclays and the bank in Casablanca had been contacted, the account frozen and the stolen money returned.

The judge, who appeared to bemoan his limited sentencing powers -- comparing the maximum 10-year sentence available to him with the 14 years that could be passed for handling and burglary -- said he must nevertheless 'do all that I can to deter those employed by financial institutions from committing such offences.'

H S Rao in London
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