Two accountants who used the names of celebrities to entice investors into a $200m (£102m) Ponzi scheme have been found guilty.
A jury at Birmingham Crown Court today found the pair guilty of perpetrating the fraud, which involved luring investors by saying that Andrew Lloyd Webber and David Frost had invested in the scheme, when neither had.
Alan White, 49, and Shinder Gangar, 46, were both partners in Dobb White & Co.
The scheme had no investments but rather relied on new addition of new victims to finance payments of the ‘returns’ to investors who were promised yields of up to 160%.
Clients were also told that their funds were protected by an insurance policy held by Dobb White.
The investors' funds were transferred to off-shore accounts but controlled by Gangar and White, who used them to pay the 'interest' payments to clients.
They also used the 'investments' to provide unsecured loans to acquaintances as well as for the purchase of properties as well as on investment in other schemes.
In addition to the frauds, the pair were found guilty of trying to bribe a US government official to release funds which had been frozen following an investigation into their US accomplice, Terry Dowdell.
The two transferred $250,000 into a US account for that purpose, needing the funds to be released in order to pay their 'interest' payments to clients in the UK.
Victims included Magdalena Petkova, who placed a total of £102,125 with the accountants. She received nothing back.
Gangar, a lapsed member of the ICAEW, was described in court as the ‘frontman’ of the operation who lured well-heeled Britons with his talk of associations with celebrities which also included Terry Brady, father of Birmingham Football Club managing director Karren Brady.
White, a former member of ACCA, was accused of being the ‘administrator’ who would give investing clients the ‘co-ordinates’ of where they should direct their cash.
One of the Serious Fraud Office's witnesses, Elizabeth Watson - whose parents, sister and aunt were also caught up in the scheme – told the jury that Gangar had ‘impressed’ her when she first met him in 2001.
‘He seemed to be dealing with well-known celebrities and was doing well. He gave me the impression he was a globetrotter…When I met Shinder Gangar, he showed me a contract signed by Andrew Lloyd Webber…I understood Lloyd Webber had invested in his scheme,’ said Watson.
Gangar later told her Lloyd Webber had invested £1.2m in his scheme, and that Terry Brady had also invested an amount of £10m.
Watson told the court that she was also led to believe that Gangar worked with 'top people' such as the Queen’s lawyers, Farrers, and that he was connected to Merrill Lynch and Wells Fargo.
Watson told the court that Gangar also claimed he had $180m (£86m) under his management. Watson invested £400,000 in the scheme, while other members of her family put in a further £300,000.
The investigation into the pair began in 2002, with charges brought in 2005.
Gangar and White sacked their legal team two weeks before the case began, deciding instead to represent themselves. Neither gave evidence.
Further Reading:
Alan White and Shinder Gangar guilty of running $200m pyramid scam
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