How Citibank fraudster duped rich investors

He was armed with his experience and title at the bank, a Securities and Exchange Board of India document, pleasing manners, and a convincing no-nonsense approach to investment advice.

Shiv Raj Puri, the alleged mastermind behind the multi-crore Citibank fraud, displayed his credibility to his potential customers, but never pushed them.

"I had met Shiv Raj Puri at the bank branch about one-and-a-half years ago. That time I had gone to open a savings account with the bank as I had business interests in DLF Phase II," a victim of Puri's scam told rediff.com.

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"About two months later, when I went to the bank, he met me again and asked me if I was looking to invest my savings in mutual funds and fixed deposits. When I showed some interest in them, he told me about a scheme which would help me invest my savings in the stock market, which would then yield returns as high as 18 per cent," the victim added.

This victim is one of the 10 high net worth individuals (HNIs) duped by Puri's scam.

The rest of his victims, who constitute two-thirds of the total, are big corporate houses, including the Hero Group. The Hero Group is believed to have invested an estimated Rs 50 crore (Rs 500 million) in Puri's lucrative scheme.

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The victim, who is a businessman and resides in Noida, said that Puri was very convincing.

"He had all genuine documents with him. He had a letter on a Citibank letterhead that authorized him to carry out the bank's scheme. Even Sebi approved of his scheme, according to the documents he showed me. I had no reason to doubt him as he made it look like I was investing with a high yield scheme approved by the bank," he said.

"Moreover, he told me that high-end corporate houses were investing in the scheme as well. After telling me about the scheme and showing me all relevant documents, he asked me to think about it and call him. I called him in December last year giving him my assent," the victim said.

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What Puri did later was get authorisation from the victim to use the funds in his account to invest in the stock market.

When asked why he did not approach the police, the victim said, "I came to know that the scheme was fraudulent only in December this year when senior bank officials called me and said they were conducting an enquiry. After that, the bank gave a formal complaint to the police."

A police officer involved in the investigations of the case said, "After getting the authorisation from his customers, Puri would divert from funds from their accounts to his or his family's accounts and then put it all the funds in to the stock markets through various brokerage firms, including the brokerage firm owned by his father, Normans Martin Brokers Private Limited. The other firms under the scanner currently are Bonanza and Religare."