Page last updated at 14:27 GMT, Thursday, 5 June 2008 15:27 UK

Directors jailed for $700m fraud

Virendra Rastogi, former chairman at RBG Resources
Virendra Rastogi was sentenced to nine years and six months in prison

Former bosses of UK metal trading firm RBG Resources have been jailed for a total of 25 years and six months after stealing $700m (£359m) from creditors.

Virendra Rastogi, Anand Jain and Gautam Majumdar were sentenced at Southwark Crown Court.

The three were found guilty of creating a false database of 300 clients to persuade banks to advance them cash.

The fraud was uncovered when false documents were inadvertently faxed to the firm's auditors.

The fraud relates to activity that took place between 1996 and 2002 and follows a lengthy investigation by the Serious Fraud Office (SFO).

It was found that using bogus documents as proof of genuine deals, the RBG directors were able to trick $700m from a consortium of banks.

Paige Rumble, the lead SFO investigator on the case, said: "This was a truly audacious and ruthlessly efficient fraud that ranged from the poorest areas of India to the corporate tower blocks of Manhattan."

She added: "The RBG Resources empire was a family business founded and driven by fraud."

'Calculated dishonesty'

Virendra Rastogi, former chairman, was sentenced to nine years and six months imprisonment and disqualified from acting as a company director for 15 years.

Director Anand Jain was handed an eight-and-a-half-year sentence, while Gautam Majumdar, chief executive, was jailed for seven years and six months.

Both were disqualified from acting as company directors for 10 years.

Passing sentence, His Honour Judge Wadsworth said the three had "created a very impressive front that fooled banks, the metal exchanges in the UK and US, and well respected accountancy firms".

He added that they "were involved in years of calculated dishonesty” and that during the trial "they had shown no shadow of regret or remorse or repentance".

The SFO's investigation was sparked by the resignation of RBG's auditor PricewaterhouseCoopers in 2002 after a number of false company documents were sent to the accountants in error from one of Mr Rastogi's colleagues in Hong Kong.

They were purportedly from different RBG customers from around the world, but all came from the same fax number.

The SFO said that a number of genuine metal traders were employed by RBG at its London offices in central London who entered into real transactions and were not aware that the business was being used as a front for a massive fraud operation.

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