Banker jailed over £1bn con must repay cash

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The Independent Online

A banker jailed for helping orchestrate a £1 billion "imaginary metal" con was warned today he would have to spend longer behind bars unless he paid some of the money back.

Guantam Majundar, 57, who was given eight months to hand over £564,000 or have his seven-and-a-half-year sentence increased by nearly half that term, raised massive loans from banks to finance non-existent deals and finance a global conspiracy branded a "crime of the utmost gravity".

London's Southwark Crown Court heard he, his partners-in-crime and largely unsuspecting staff created for Piccadilly based RBG Resources a "very complicated" edifice of deceit with an "incestuous" web of 324 "client companies".

But the businesses, supposedly with multimillion-pound turnovers, were simply "sham" operations in small flats and shops with few assets beyond a table and chair.

One even turned out to be an Indian cow shed, another a launderette in America, while a third was the home of an elderly woman who sold scrapbooks.

With the help of headed notepaper and company stamps for each "shell" trader, a complex paper trail of bogus orders, deliveries and accounts was created to "use and abuse" the trust the industry relied on.

As the financial world increasingly saw RBG as a highly successful international metal trader with an annual 1 billion turnover, bank cash was pocketed in ever larger amounts.

At one point "mastermind" Virendra Rastogi's illicit wealth even put him on the Times Rich List, while an MP and no fewer than three Lords were among his unsuspecting advisers.

Suspicion was averted by systematically clearing loans with even bigger borrowings until thefts mushroomed into nine figures.

But a simple mistake - one of RBG's "flunkies" pressing the wrong button on a Hong Kong fax machine - triggered the operation's downfall.

As Rastogi, 41, and his accomplices desperately tried to stave off disaster, workers were ordered into the office for "file tidying" weekends and were issued with "pure theatre" scripts to learn in case the auditors called.

By the time the massive "empire of imaginary metal" was finally exposed, the trading giant was "rotten to the core".

Investigators found that of the £1 billion conned from American and UK banks, £343.5 million had disappeared.

Much of it was laundered through Switzerland and Dubai, where a staggering £133 million is said to have been withdrawn in cash.

A further £85 million is thought to have been sent to India.

When police raided Rastogi's luxury apartment in Portman Square, Mayfair, central London, he was frantically shredding documents in a last-ditch attempt to avoid justice.

He was convicted of one count of conspiracy to defraud between January 1, 1996, and June 1, 2002, and was jailed for nine-and-a-half years in April 2008.

Right-hand man Anand Jain, 44, of Nether Street, North Finchley, north London, the head of RBG's day-to-day trading, and "financial adviser" Majundar, who lived with his wife in Chennai, India, were also found guilty of the conspiracy and received eight-and-a-half and seven-and-a-half years respectively.

Today Judge James Wadsworth, QC, said it was clear Majundar - who was not in court - was an "experienced banker" and had been "on side" from the moment he joined RBG.

He said: "I am satisfied that he, Majundar, operated from the very beginning with full knowledge of what the conspiracy was to be."

Bearing that in mind, the judge was satisfied Majundar's benefit from the scam was £930,866.

He also ruled his assets - comprising half the equity in his former £1.25 million Wimbledon townhouse, a property in Kolcatta, India, pension, shares, securities and savings - was £564,414.77.

"That must be paid by May 28, 2010, or there will be a (consecutive) sentence in default of three-and-a-half years," the judge added.

He added Rastogi, who has properties in Bahrain and Dubai, will face a confiscation hearing on April 26 next year, when the Crown will argue his benefit figure should be assessed at £1 billion.