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Citibank branch fraud suspect Shivraj Puri arrested

New Delhi: Shivraj Puri, the alleged mastermind behind a major fraud in the Citibank branch here, was today arrested.

Top police officials, however, declined to give details including from where he was arrested. He is likely to be produced before a court tomorrow.

Meanwhile Police Commissioner S S Deswal told reporters that the size of the fraud could be about Rs 300 crore.

He said 40 teams have been constituted to crack the case that involved alleged siphoning off funds taken as investments from high networth individuals into a personal account of the main suspect Puri and three of his accomplices.

Deswal said Puri’s father Raghuraj Puri is said to be owning a brokerage firm Norway Martin through which diverted funds were invested in the stock market.

The alleged fraud which could run into Rs 300-400 crore was detected on Tuesday at the Gurgaon branch. An FIR for cheating and forgery against Puri and three others was lodged and 18 accounts having close to Rs 4 crore frozen were frozen.

The fraud is said to be a handiwork of Puri, a relationship manager at the branch, who allegedly sold investment products to high networth clients claiming that they would generate unusually high returns.

Police sources said Puri had been running his own company while on the payrolls of the bank.

Puri had started a company ‘G2S Management Consultants’, taken money from high networth individuals (HNIs) and deposited in his company’s account from where he invested that money in stock market.

Also, he routed some of the money to his other accounts in different banks.

According to the complaint filed by Binu Soman, assistant vice-president, Citibank, Puri opened a joint account (5011666247) in September 2009 in the bank.

The account was in the names of Puri and his three alleged accomplices – Prem Nath Puri, Sheela Prem Nath Puri and Diksha Puri.

He allegedly routed the funds through brokerage firms like Religare Securities and Bonanza Portfolio, where the accused had an active demat accounts. M. Venkat Raman, compliance officer of Bonanza Portfolio Ltd, said that Puri has a personal broking account with one of its branches.

“In the light of recent developments, we have proactively frozen the related accounts and suspended all transactions. We have communicated our actions to the regulator and await further instructions,” he added.

According to Gurgaon police commissioner S.S. Deswal, Puri collected about Rs 200 crore from various individuals. Puri is said to have lured HNIs into investing in unauthorised schemes using a forged Securities and Exchange Board of India (Sebi) letter and a fake letter from Citibank as well.

“We are calling up all the investors and inquiring the nature of promises that were made by the accused to them and looking into the role of the investors in the crime,” Deswal said.

However, no investor has yet made any complaint about the issue and the network of the fraud is yet to be ascertained.

The police is also tracing the possibility of involvement of investors in the fraud and cyber crime officials, too, have been involved, as many transactions were carried out through net banking.

Most of the corporates which invested with Puri belong to the Hero Group. Naveen Munjal of Hero Exports alone had given around Rs 50 crore to Puri for further investment, the officer said.

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