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Citibank fraud: Brokerage firms staff grilled

Dec 31, 2010 01:03 PM IST India India
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Gurgaon: The investigation into the over Rs 300 crore Citibank fraud in Gurgaon is getting wider with two brokerage firms now coming being the scanner. Gurgaon police are now questioning executives of brokerage firms Religare and Bonanza.

Police officials say that the bulk of the money collected by Citibank staffer Shivraj Puri, who is accused of masterminding the fraud, went to two brokerage firms.

Sources say Puri after collecting funds from his clients used to deposit them in his accounts in Citibank and then further channelise them in accounts in the name of Bonanza and Religare.

The CFO of Hero Corporate, Sanjay Gupta, is also being questioned. Police are keen to examine his role but are not commenting on his involvement.

The Hero Group was one of Puri's biggest clients. Puri was arrested on Thursday by the Gurgaon police and charged with fraud, criminal conspiracy, forgery and cheating.

He will be in police custody for seven days with police not ruling out the possibility of the involvement of corporate executives and other bank employees.

Puri, armed with a fake SEBI order would lure investors to pump in money in high interest schemes. Sources in the police fear that the massive fraud could not have been successful without the support of insiders. Citibank on its part says that it is fully cooperating with the authorities.

"Citibank is cooperating fully with the investigations. We have given all the documents for investigation," said Citibank lawyer Harish Malhotra.

The police have stumbled upon close to 80 bank accounts which were being operated by Puri - all have now been frozen.