Indian police have announced that they have arrested a key suspect in a multi-million-dollar scam unearthed at a Citibank branch in Gurgaon, a booming satellite city outside New Delhi. Police allege that more than four billion rupees (88 million dollars) was channeled by Citibank employee Shivraj Puri and his partners into bogus financial schemes from the accounts of corporate clients and wealthy individuals.
The alleged fraud came to light when one of the bank’s clients mentioned the scheme to a senior manager. Investigations revealed that employees at the bank in Gurgaon, where many international companies are based, had forged letters to sell the fake investment schemes. Citibank said in a statement that it was inspecting suspicious transactions and providing full assistance to the authorities. After his arrest, Puri told the Times of India “I have already given full details to the police. I have full faith in the judiciary. Truth will come out.”
The allegations are the latest financial scandal to hit India. Last month several senior executives of state-run banks and an insurer in Mumbai were arrested over bribes totaling more than 200 million dollars paid to sanction loans to property developers.Financial fraud has risen to unseen proportions in the past decade – thanks to globalization and the increase of investors, along with the rise of complex financial instruments that few fully understand. With the recent arrests by the Italian government on derivatives fraud, coupled with this latest news from India there is a clear pattern developing: nations are cracking down. With the improved regulations and oversight beginning to take hold, this should hopefully restore investor confidence, and decrease the booming fraud market.
