‘Never trust a man in a cravat’ runs the adage.
Kautilya Nandan Pruthi. It’s a shame Pruthi’s victims didn’t heed it. Many could scarcely believe their luck when they were invited to join one of the country’s most lucrative investment clubs, offering returns of up to 13% a month. It seemed above board as several celebrities had signed up. Nobody suspected they were to lose their shirts in Britain’s biggest-ever Ponzi scheme. Recently, the perpetrator of the £115m scam, Kautilya Nandan Pruthi (pictured), was jailed for 14 years. With his flowing locks and dramatic wardrobe, police describe the Indian-born businessman as “a flashy operator”. Yet even experienced investors – including several former Merrill Lynch bankers -were taken in by his loquacious charms. As Pruthi’s own defence counsel said in court, he could be “mesmeric”. “You can’t imagine the plausibility of this man,” one victim (a former Whitehall mandarin). “He arrived in a big, shiny Bentley, and oozed composure and confidence. He was also terribly dapper” – smart shoes, a nice suit, and the ubiquitous cravat. He dropped the names of high-profile clients – “It was like he was doing you a favour letting you into his clique”.
Pruthi told investors that his firm, Business Consulting International, was an upmarket lender offering high-rate bridging loans to import and export firms. In fact, it was a classic Ponzi: he simply returned some of the cash they invested every month – baiting the trap for them to reinvest and recommend his fund to family and friends. Word of mouth was crucial. Pruthi, who began taking deposits from investors in 2005, knew the value of first impressions, decking out his Knightsbridge offices like a classy fund management outfit and boasting of being one of London’s richest men. As the cash rolled in, funding sumptuous houses, cars and a private jet (which crashed, killing five people) the lie seemed ever more plausible.
Little is known about Pruthi’s early life in India. He told some people he’d left school at 15 to become an entrepreneur; others that he’d studied for an MBA. But the global scale of his fraud – encompassing Dubai, Thailand, Australia, Singapore and Spain – suggests he travelled widely. “He spun a spider ’s web of corruption, stretching around the world,” said prosecutors. Before coming to Britain ten years ago, the US jailed him for a smaller fraud. That conviction went undetected by the British authorities. When he was arrested, victims found it hard to accept they’d been conned. Some wrote to their MPs to complain that police were ruining their investments. “A cold- hearted criminal driven by greed, with an unquenchable desire to steal and spend,” concluded the City of London police about Britain’s Bernie Madoff.