14 years for 'Ponzi' fraud mastermind Kautilya Nandan Pruthi

Kautilya Nandan Pruthi duped celebrities and sport stars out of £115 million in Britain's biggest 'Ponzi' investment scam (PA)

Corrupt businessman Kautilya Nandan Pruthi, who duped celebrities, sports stars and hundreds of other victims out of £115 million in Britain's biggest "Ponzi" investment scam, was jailed today for 14 years and six months.

Indian-born Pruthi was labelled a "professional fraudster" as he was sentenced at Southwark Crown Court, and told he faced deportation back to his home country following his jail term.

Pruthi's associates John Anderson and Kenneth Peacock, who were found guilty by jury of unauthorised regulated activity, were jailed for 18 months for their part in the fraud.

Former cricketer Darren Gough and actor-turned-singer Jerome Flynn were among 800 people scammed as flamboyant fraudster Pruthi claimed he was one of the richest men in London.

Investors lost life savings after being told they would get massive revenue returns unmonitored by the Financial Services Authority.

Delivering his sentence to Pruthi, Judge Michael Gledhill QC said: "You are an extremely intelligent, articulate, sophisticated and plausible liar. In short, a professional fraudster.

"You set up and masterminded what may well be the largest and longest running Ponzi fraud to come before the courts in this country."

Many investors lost their homes, pensions and life savings, he added.

Mr Gledhill said Peacock and Anderson, who the court heard had since undertaken psychiatric counselling, were as much victims of Pruthi as other investors.

"They trusted you completely, as did everybody else that came into your orbit. They believed every false representation you made about your scheme - why would they have invested and then encouraged family and friends to give you their money?" he added.

Pruthi was also made subject to a financial report order and qualifies for automatic deportation after his release from prison, the court heard.

Police said parents of disabled children and a host of undisclosed well-known names became victims as Pruthi and his associates lived in multi-million pound homes, drove Ferraris and flew in private jets.

The court was told at least 585 investors fell victim to the scheme, although as many as 700 may have been conned.

Even bankers with Merrill Lynch, one of the world's leading financial management companies, were duped into believing Pruthi's lies, a source said.

Pruthi made £38 million from the swindle over three years while victims lost a total of £115 million.

The con artist was arrested, with associates Anderson and Peacock, in May 2009 after City of London police launched a nationwide investigation into Ponzi fraud.

But divorced father-of-one Pruthi, 41, had already spent much of the cash during half a decade of womanising, extravagance and fast cars.

Officers, who say he was Britain's most prolific Ponzi fraudster "by some way", fear they may only be able to return around £2 million to victims.

Pruthi blew hundreds of thousands of pounds a month renting properties in central London along with a mansion in Ascot.

Bentleys, a Ferrari, a Jaguar XKR, a Maserati and even a private jet were purchased before the three were arrested.

Pruthi also ploughed some of the millions into luxury racing firm Apex Motorsports in a bid to impress investors.

Detective Superintendent Benjamin Flannaghan, who led the City of London police inquiry, said Pruthi was a "flashy operator".

"You could tell he was an extravagant man just by looking at his dress-sense," he said.

"He always wore a cravat and only wore brightly coloured clothes and suits.

"He had a shock of long dark hair which was heavily receding. His own defence counsel said in court that he was 'mesmeric'."

The private jet he owned was destined for tragedy. Five people were killed as his Cessna Citation 500 aircraft crashed after an engine shutdown in Farnborough, Kent, on the afternoon of March 30 2008.

Former British Touring Car Championship driver David Leslie, 54, Apex Motorsport boss Richard Lloyd, 63; Christopher Allarton, 25; and pilots Mike Roberts, 63, and Michael Chapman, 57, all died when the plane hit a house.

Actor Flynn, who found fame in his role as Corporal Paddy Garvey in 1990s TV series Soldier Soldier, was named during the Southwark Crown Court trial as one of hundreds of investors to fall foul of the scam.

Pruthi began taking deposits from investors around the world in 2005, offering a headline return rate of 156% per year on investments.

He said he was using funds as high interest loans to distressed trading companies involved in the import and export of goods, whereby these companies would be charged 18% per month.

He won the trust of wealthy businessmen, sports stars and celebrities impressed by his luxurious lifestyle and plush offices based in Knightsbridge.

Investors from Britain, Australia, Singapore, Hong Kong, Thailand and Spain were eventually lured into parting with their cash at the prospect of easy money.

"It is like a spider's web of corruption stretching around the world," Mr Flannaghan said.

"There is not a continent that is not touched by it. It was sold to people as a private limited scheme to friends and families. It was anything but."

Among those lured into the scheme were Anderson and Peacock.

Pruthi, of Wandsworth, south-west London; divorced former accountant Anderson, 46, of West Hampstead, and married Peacock, 43, of Camberley, Surrey, were all made bankrupt after their arrests.

Before trial, Pruthi pleaded guilty at Southwark Crown Court 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.

Anderson and Peacock were found guilty by a jury of unauthorised regulated activity but cleared of fraud and recklessly making a misleading, false or deceptive promise.

Detective Superintendent Bob Wishart said: "Pruthi used fast cars, helicopters and luxury houses to create an illusion of success and legitimacy.

"In reality he was a cold-hearted criminal driven by greed, with an unquenchable desire to steal and spend leading to the construction and collapse of the UK's biggest Ponzi scheme.

"It took a complex and painstaking investigation over several years to blow away all the smoke screens and ensure Pruthi faced justice.

"Unfortunately there is no way of repairing the damage done to many of their victims lives, their money is gone."

Ponzi fraud, named after Italian fraudster Charles Ponzi, involves the payment of purported returns to existing investors from funds contributed by new investors.

PA