Suspects in alleged Ponzi scheme ordered to return £115m to investors

Three men accused of operating one of the UK's largest ever Ponzi schemes have been ordered by the High Court to pay back more than £115 million to investors.

However the alleged victims are unlikely to ever see any of that cash, the City regulator has warned.

Some 500 individuals are reported to have placed money with schemes operated by the three men, John Anderson, Kenneth Peacock and Kautilya Nandan Pruthi. They were typically offered returns of between 4% and 13% a month, with a ‘guarantee’ of full return of capital at the end of the investment period.

The men then used the money to provide short-term financing for companies and partnerships, for which it typically charged between 15% and 18%.

The three men, who operated as Business Consulting International, John Anderson Consulting and Kenneth Peacock Consulting, did not register their operation with the Financial Services Authority, arguing that investors were making loans rather than deposits.

The schemes started marketing to investors 'by invitation only' in 2006, and by 2007 were operating out of offices in London's fashionable Brompton Square.

The FSA, however, argued that the men were accepting deposits, and that the scheme was therefore illegal under the Financial Services and Markets Act 2000. The City regulator applied to the High Court for a restraining order and freezing of the scheme’s assets in November 2008, and won a major ruling against the men in March 2010.

The City of London Police is also investigating the scheme, and in May 2009 arrested three men on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation. A fourth man was arrested on suspicion of money laundering in July 2009, and a police investigation into Mayfair-based consultancy Business Consulting International continues.

None of the men has so far been charged.

As part of yesterday’s ruling the High Court ordered Pruthi to pay back around £90 million, Anderson just over £13 million and Peacock close to £12 million. However the FSA warned that previous experience suggested investors would receive little or none of their initial investment.