Two men have been convicted of involvement in the UK's largest Ponzi fraud, which saw hundreds of people – among them the former cricketer Darren Gough and the actor Frances de la Tour – lose £115m. John Anderson, 46, and Kenneth Peacock, 43 were found guilty of unauthorised regulated activity at Southwark crown court in London on Monday, but were cleared of one count each of fraud. The jury is still deliberating over allegations that they deceived investors. The scheme's mastermind, Kautilya Pruthi, 41, of Wandsworth, London, has pleaded guilty to the fraud and is due to be sentenced later this week. Ponzi frauds – which take their name from the Italian conman Charles Ponzi, who was particularly fond of employing the scheme – use cash from new investors to pay returns to existing investors and depend on a constant stream of new investors to fund the payouts. The court heard that Gough and the actor and singer Jerome Flynn are each thought to have lost up to £1m in the fraud, which also duped De la Tour. Victims handed over their cash to Pruthi, who promised them safe investments with returns of up to 13%. Instead, he spent their money on entertaining women, paying his daughter's private school fees and chartering helicopters. He also bought a private jet and built a car collection that included three Bentleys, a Lamborghini, two Ferraris, two Mercedes, a Rolls Royce, a Jaguar and a Maserati. "Mr Pruthi is believed to be the UKs most successful Ponzi fraudster," said David Aaronberg QC, prosecuting. "He obtained some £38m from investors and caused contractual losses of over £115m." Aaronberg added: "He enjoyed the company of women and was generous in the payments he made to a number of female friends, for whom he bought cars as presents, in total giving them £373,149." Indian-born Pruthi came to the UK in 2004 having been deported to his homeland after serving a sentence for faking documents in the US. Jurors heard that on coming to the country, Pruthi was quickly able to pose as "a wealthy individual". After setting up his company, Business Consulting International, said Aaronberg, Pruthi accepted deposits and "orchestrated a large-scale and sophisticated collective investment scheme". He would send personally tailored emails claiming he could offer up to 13% returns on 12-month investments because the scheme was available to a limited clientele. But in reality, said the prosecutor, he was "robbing Peter to pay Paul". Pruthi, who was not registered with or authorised by the FSA, admitted four counts of obtaining money transfers by deception, one of participating in a fraudulent business, one of unauthorised regulated activity and one count of converting and removing criminal property. Peacock, of West Hampstead, north London, and Anderson, of Surrey, are alleged to have acted as "aggregators" who pooled funds from third parties and then passed them on to Pruthi, who had duped them into the fraud at the outset. Eventually the scheme collapsed as there were not enough new investors to bring in the money needed to keep the old investors happy. "The scale of this scheme was vast and the losses were immense; several investors lost their homes, others have been declared bankrupt," said Aaronberg. "The monies which Pruthi received were generally not invested anywhere, neither in the UK nor abroad." According to the prosecution, of the £38,631,792 Pruthi obtained, £28m was used to pay back other investors, while £10m was siphoned off for Pruthi's "lavish lifestyle".
The judge in R. Allen Stanford’s fraud trial ordered the jury to return to deliberations after the panel sent a note saying it couldn’t reach a unanimous verdict in its fourth day of reviewing the evidence. The eight men and four women on the jury told U.S. District Judge David Hittner in Houston yesterday they were “unable to reach a verdict on each of the 14 counts,” the judge said, reading their note to attorneys for both sides. Enlarge image R. Allen Stanford, accused of leading a $7 billion investment fraud scheme, gestures as he exits the Bob Casey Federal Courthouse in Houston, Texas. Photographer: F. Carter Smith/Bloomberg Hittner instructed jurors to “continue your deliberations in this case,” telling them the trial has been costly in terms of both time and money, that the lawyers were unlikely going to be able to put on a better trial and that another jury was unlikely to be more conscientious. “It is your duty to agree upon a verdict if you can do so, without surrendering your conscientious opinion,’” Hittner told them. Stanford, 61, is accused of leading a $7 billion international fraud scheme involving the sale of certificates of deposit issued by his Antigua-based bank. He faces as long as 20 years in prison if found guilty of the most severe charges, mail fraud and wire fraud. The financier maintains he is not guilty. After the jury returned to deliberations, lead prosecutor Gregg Costa told the judge the jury’s note could be construed as meaning it couldn’t agree on any one of the 14 counts against Stanford or upon all of the counts. ‘We’ll See’ While acknowledging the possibility of having to accept a partial verdict, Hitter said, “We’ll see what comes out next.” When Hittner instructed the jurors to “take all the time you may feel necessary” to reach a verdict, one of the jurors grimaced. The jury left for the day yesterday after being told to resume deliberations. Jury selection in the case began Jan. 23 and the panel heard five weeks of evidence. The government presented testimony at from investors who bought the allegedly fraudulent CDs as well as from the executives who helped sell them. The witnesses included government officials and former Stanford Group Co. Chief Financial Officer James M. Davis, who pleaded guilty to fraud-related charges in 2009 and testified for five days against Stanford. Davis, whose relationship with Stanford traces back to when they were Baylor University roommates, told the jury he knew the boss was committing fraud and didn’t stop it. The defense presented former Stanford employees who said they saw no evidence of fraud at the company. Some offered testimony in support of the defense’s contention that Stanford was an absentee visionary who left the details of running his operation to Davis. Stanford didn’t testify during the trial.
The liquidators of Aurora Empowerment Systems, which is accused of asset-stripping bankrupt Pamodzi Gold, will lay charges of fraud this week against Nelson Mandela’s grandson Zondwa, and Ahmed Amod, an attorney for the company. The liquidators are also said to be planning to lay charges this week against Aurora chairman Khulubuse Zuma and possibly other directors under section 424 of the Companies Act, under which directors can be held personally liable for company debts. The charges follow a threat by the liquidators to lay charges of perjury against Thulani Ngubane, a director of Aurora, after he gave evidence at an inquiry.
A woman riding in the passenger seat of an SUV driven by Young Buck was shot in the shoulder early this morning when another car drove alongside and opened fire, but the rapper was unharmed ... this according to a local report. The woman was treated and released according to WSMV in Nashville, TN. There was a third passenger in the vehicle who was also not injured. The shooting occurred at approximately 3:30 AM, police told the television station. Young Buck is from the area and was reportedly back in town for a music project.
Like most prisons, Bang Kwang Central reeks of decay. But the fetidness of the "Bangkok Hilton", as it is known by inmates, is more indicative of the soul of the place than the damp edifices that contain the men. Built in the 1930s to hold 3500, the maximum security prison in Thailand's biggest city now houses about 8000 inmates, who have been sentenced to more than 25 years each, as well as hundreds awaiting the outcome of their pending appeals, or execution. Leg irons provide a means of status identification: new inmates wear theirs for the first three months, whereas those on death row have their shackles permanently welded on. Fates are determined by will or whim -- a royal birthday here, a public holiday there. The stroke of a monarch's pen determines who shall live, die or be released. And in the interim both the panacea for and consequence of not knowing is insanity: the inmate's survival guide. At the time of his arrest for heroin trafficking, South African Alexander (Shani) Krebs was 34 years old. Initially condemned to death, his sentence was commuted to 100 then 40 years. He has not spent a nano-second in a democratic South Africa, having been arrested a day before the elections in 1994. Over the years he earned the tragic reputation of being the longest-serving farang, or foreigner, in Bang Kwang. But on December 5 Thailand's monarch, King Bhumibol Adulyadej, benevolently issued an amnesty of sorts, courtesy of his birthday, to all farangs convicted of drug offences. In Thailand the seventh cycle, or 84th birthday, is a significant milestone for the monarchy and special celebrations are organised for the entire year. For the foreign inmates it means that one-sixth of their sentences has been reduced. For prisoners incarcerated since 1994, like Krebs, it signals an early release. Although most of the 11 convicted South African drug mules in Thailand have been incarcerated for more than 15 years, it is unclear who else will be released with Krebs. And South Africa's department of international relations and co-operation is not providing answers. What is certain, according to his family, is that Krebs will be released on April 22 -- eerily, almost 18 years to the day of his arrest. On Facebook, where a 751-strong support group was established in 2008, Krebs's friends have been relentlessly posting messages of support and daily marking the countdown. "Shani, only 56 days to go ... every day gets brighter. x," writes Sue. "Support our friend in the last steps to victory," says Erwin. There are psychedelic artworks and photo-shopped collages of Krebs on an aeroplane, Krebs giving the thumbs-up, Krebs reunited with his family in Johannesburg. "We wanted Shani to see how much he has been missed and how his loved ones are literally counting the days till he returns," said his sister, Joan Sacks. Since 1994 she has campaigned tirelessly for his release and kept him updated through letters and the occasional five-minute phone calls permitted by the Bang Kwang authorities. Sacks has also set up a website through which prints of his paintings -- Krebs became an accomplished artist during his incarceration -- can be bought. Arrested in Thailand Meeting him in 2009, through a double layer of bars, wire and glass, was akin to staring at the portrait of Dorian Gray. His curly hair had remained youthfully long, his body ripped and his face -- from a distance, at least -- seemed protected from the ravages of age that cleave creases, folds and furrows into the rest of us. He was 49 years old. Krebs wore a crisp white T-shirt and immaculately pressed blue trousers. He had been up most of the night, he said, copiously preparing notes for our first interview. He was charming and cheerful. He refused to divulge details of his incarceration -- the agonising months in solitary confinement, the daily drudge of prison life, the creeping despair that all he might ever do in his life was time. He made no mention of the sweat-soaked bodies crammed into cells measuring six metres by four metres, forced to sleep spoon-like, or the pungency of the open sewerage system, or the cesspool of disease that is Bang Kwang.
The UK oil company will pay damages to the thousands of hoteliers, shrimpers and oystermen along the Gulf Coast who were caught up in America's worst oil spill. The settlement follows a week of intense talks in New Orleans between lawyers for the local businesses and BP's legal team. Following the agreement, US District Judge Carl Barbier delayed for a second time the trial into who should shoulder the blame for the explosion that killed 11 people and injured many more in April 2010. The trial had been rescheduled to start tomorrow after Judge Barbier had given BP another week to find a deal. "The proposed settlement represents significant progress toward resolving issues from the accident and contributing further to economic and environmental restoration efforts along the Gulf Coast," said Bob Dudley, BP's chief executive. BP said that the $7.8bn will come from the $20bn fund - known as the Gulf Coast Claims Facility (GCCF) - the company established in the summer of 2010 to compensate local individuals and businesses hit by the spill. Just $6.1bn of that pot of money has so far been spent. The agreement, which requires the approval of Judge Barbier, covers economic damages for the tens of thousands of plaintiffs who had opted for a day in court rather than apply for compensation from the GCCF. It also covers medical damages suffered by locals in the wake of a spill that led to the release of more than 4m barrels of oil into the waters of the Gulf before the Macondo well was capped in July 2010. Of the $7.8bn, BP said that $2.3bn would go to compensate those who work in the Gulf's seafood industry.
Powerful storms stretching from the U.S. Gulf Coast to the Great Lakes in the north wrecked two small towns and killed at least 28 people as the system tore roofs off schools and homes and damaged a maximum security prison. It was the second deadly tornado outbreak this week. At least 28 people were killed, including 14 in Indiana and 12 in Kentucky, authorities said. In Indiana, Marysville was leveled and nearby Henryville also suffered extreme damage. Each is home to about 2,000 people. "Marysville is completely gone," said Clark County Sheriff's Department Maj. Chuck Adams. Aerial footage from a TV news helicopter flying over Henryville showed numerous wrecked houses, some with their roofs torn off and many surrounded by debris. The video shot by WLKY in Louisville, Kentucky, also shows a mangled school bus protruding from the side of a one-story building and dozens of overturned semitrailers strewn around the smashed remains of a truck stop. An Associated Press reporter in Henryville said the high school was destroyed and the second floor had been ripped off the middle school next door. Classroom chairs were scattered on the ground outside, trees were uprooted and cars had huge dents from baseball-sized hail. Authorities said school was in session when the tornado hit, but there were only minor injuries there. Afterward, volunteers pushed shopping carts full of water and food up the street and handed it out to people. The rural town about is the home of Indiana's oldest state forest and the birthplace of Kentucky Fried Chicken founder Col. Harland Sanders. Ernie Hall, 68, weathered the tornado inside his tiny home near the high school. Hall says he saw the twister coming down the road toward his house, whipping up debris in its path. He and his wife ran into an interior room and used a mattress to block the door as the tornado struck. It destroyed his car and blew out the picture window overlooking his porch. "There was no mistaking what it was," he said. The powerful storm system was also causing problems in states far to the south, including Alabama and Tennessee where dozens of houses were also damaged. The threat of tornadoes was expected to last until late Friday. The outbreak comes two days after an earlier round of storms killed 13 people in the Midwest and South. At least 20 homes were badly damaged and six people were hospitalized in the Chattanooga, Tennessee, area after strong winds and hail lashed the area. In Cleveland, another Tennessee town, Blaine Lawson and his wife Billie were watching the weather when the power went out. Just as they began to seek shelter, strong winds ripped the roof off their home. Neither were hurt. "It just hit all at once," said Blaine Lawson, 76. "Didn't have no warning really. The roof, insulation and everything started coming down on us. It just happened so fast that I didn't know what to do. I was going to head to the closet but there was just no way. It just got us." Thousands of schoolchildren in several states were sent home as a precaution, and several Kentucky universities were closed. The Huntsville, Alabama, mayor said students in area schools sheltered in hallways as severe weather passed in the morning. An apparent tornado also damaged a state maximum security prison about 10 miles (16 kilometers) from Huntsville, but none of the facility's approximately 2,100 inmates escaped. Alabama Department of Corrections spokesman Brian Corbett said there were no reports of injuries, but the roof was damaged on two large prison dormitories that each hold about 250 men. In California, a late winter storm that dumped at least 6 feet (1.8 meters) of snow in parts of the Sierra Nevada mountains created ripe conditions Friday for snow sports enthusiasts but also posed avalanche dangers, as one man died while skiing in back country. Contributing to this report were Associated Press writers Jim Suhr in Harrisburg, Illinois, and Jeff Martin in Atlanta, Associated Press videojournalist Robert Ray in Cleveland, Tennessee, and AP Radio's Shelly Adler in Washington.
THE prevalence of internet pornography is turning more Australians into sex addicts, an SA rehabilitation expert says. "The amount of porn that is readily available to anyone, especially on the internet, will lead to a serious public health problem," said Robert Mittiga, who runs the GATS Counselling centre on Hackney Rd, one of only two clinics in Australia that treats sex addiction. Mr Mittiga said he treated up to 40 sex addicts a year but expected the number to grow as more people learned about the condition. "Research has shown that about 10 per cent of any population are addicted to sex," he said. Mr Mittiga conservatively estimated up to one million Australians could have the problem. He said the internet - and young people's access to it - exacerbated the problem. He likened its wide array of pornography to marijuana, which he said was a gateway to harder and harder drugs. "Many sex addicts were exposed to pornography at a very young age, before their minds could properly process it. It could've been their father's magazines under the bed, but these days it is readily available on the internet," he said. "Sex addicts on the internet often experience a rapid progression of their addiction as they trawl deeper and deeper into hard-core porn to get their fix." He acknowledged there was a debate over whether it could really be classified as an addiction but said he treated it as an addiction because it met all the criteria. "Sex addicts have the same mood alterations as people addicted to substances like drugs or alcohol," he said. "Most importantly, they continue their behaviour despite the serious life-changing consequences, such as lost relationships, STDs and legal problems." Mr Mittiga said he was treating younger people, including women, and had one client who had begun stealing to pay the $90,000 he spent on prostitutes. He said the movie Shame, about an addict who pursues sex even though he gets no real pleasure out of it, was an excellent representation of the problem.
Two senior Scotland Yard officers who dismissed the true scale of phone hacking at the News of the World had a close relationship with some of its journalists who were later arrested for alleged crimes at the paper, the Leveson Inquiry heard yesterday. John Yates, the Met's former assistant commissioner, had eight meetings with Neil Wallis, the paper's deputy editor until 2009, between 2009 and 2010, six while he was looking into alleged phone hacking at Mr Wallis's former paper – none of which was declared in the Metropolitan Police's register of hospitality. Mr Yates also had several meetings with NOTW crime editor, Lucy Panton. Andy Hayman, the assistant commissioner with oversight of the hacking inquiry in 2006, Operation Caryatid, which prosecuted only the paper's royal editor and its private investigator despite much wider evidence of wrongdoing, also had evening engagements with Mr Wallis and Ms Panton. After the Met launched fresh investigations into the paper, detectives arrested Mr Wallis in July 2011 on suspicion of phone hacking and Ms Panton in December 2011 on suspicion of police corruption. In a day of evidence highlighting the intimate professional and personal connections between senior Met staff and Rupert Murdoch's tabloid, the inquiry disclosed the meetings from notes they had made in their Scotland Yard diaries. The inquiry asked Mr Yates about an email sent by the NOTW's news editor James Mellor to Ms Panton, the crime editor, on 30 October 2010, asking her to find out more from him about a bomb found in a printer cartridge on a cargo aircraft. Mr Mellor wrote: "John Yates could be crucial here. Have you spoken to him? Really need an excl [exclusive] splash [front page] line so time to call in all those bottles of champagne..." Robert Jay, QC, the Leveson Inquiry's counsel, was particularly interested in meetings between Mr Wallis and Mr Yates, who in July 2009 decided not to reopen Scotland Yard's investigation into phone hacking after spending several hours reviewing the progress of the investigation carried out three years earlier. His diary showed a close connection to Mr Wallis. On 3 June 2009, for instance, he had a "private appointment" with Mr Wallis, the property developer Nick Candy and the PR entrepreneur Noel Redding at an Italian restaurant in London. In September 2009 – while Mr Yates was beginning to look afresh at the hacking inquiry following new disclosures in The New York Times – he again met Mr Wallis (who had by then left the paper) at the Mayfair restaurant Scotts. Among many other meetings with the NOTW's staff, Mr Yates had dinner with its editor, Colin Myler, and Ms Panton at the Ivy Club, private rooms above the famous theatreland restaurant in London, on 5 November 2009. Giving evidence by video link from Bahrain, where is he helping organise its police force, Mr Yates said Mr Wallis was "certainly a good friend" and had not declared the meals and drinks because they were "private engagements" for which he sometimes footed the bill. He added that he could not have known at the time that Mr Wallis, the deputy editor of the paper in 2006 at the time its royal editor, Clive Goodman, was arrested for phone hacking, would later become a suspect. Mr Goodman and the NOTW's private investigator Glenn Mulcaire were jailed in January 2007 for intercepting the voicemails of a total of eight people – whereas police now suspect other NOTW staff were involved and that the total number of victims will be 829. The inquiry produced minutes of a briefing from Scotland Yard on 9 July 2009, which indicated that Mr Yates may not have been told about the full scale of the evidence seized by police from Mr Mulcaire in 2006. One sentence read: "No evidence to support wider phones had been intercepted." Mr Yates denied that he had "been plied with champagne by Lucy Panton", but agreed he had drunk champagne with her. Mr Hayman, who was the senior counter-terrorism officer in 2006, dined with Ms Panton on 8 November 2005 and met her again at Scotland Yard on 11 November that year. He said he knew few details about Operation Caryatid. Sun's defence editor is arrested The defence editor of 'The Sun' has been arrested on suspicion of paying public officials for information. Virginia Wheeler, 32, appeared at a south London police station by appointment to answer questions related to evidence sent by News Corporation's management standards committee to Scotland Yard. 'Sun' publisher News International confirmed Ms Wheeler had been arrested in an email sent to its staff. A Metropolitan Police spokesman later confirmed a 32-year-old woman had been bailed to a date in May. Ms Wheeler had been abroad on extended leave. Police are understood to have wanted to question her for several weeks. Her arrest in connection with Operation Elveden follows those of 10 other former or current employees at 'The Sun'. Ian Burrell Murdoch briefed on terror by Met Scotland Yard chiefs briefed Rupert Murdoch on terrorist operations, the inquiry was told yesterday. Peter Clarke, who headed the force's counter-terror division, told the Leveson Inquiry there was "scepticism" in the media that the capital was a target before the 7 July attacks in 2005. He said he met Mr Murdoch when he was briefing senior journalists at News International's Wapping headquarters in August 2004. NOTW reporter denies MP's claims 'News of the World' reporter, Alex Marunchak, who was accused by the Labour MP Tom Watson of knowing a murdered private detective was about to sell a story on police corruption shortly before he was killed in 1987, has dismissed the claims as an "Oscar ceremony" performance. Mr Maranchuk said he had never heard of Daniel Morgan, or his employers, Southern Investigations, under after his murder. Leveson: I will stop more leaks Lord Justice Leveson has criticised leaks from his inquiry, which may include the revelation that Scotland Yard loaned a horse to former News International chief executive Rebekah Brooks. He warned yesterday that he could restrict advance release of witness statements to core participants if the leaks continue. The leaks would constitute a breach of confidentiality and could disrupt the inquiry, he said.
The defence editor of the Sun newspaper was arrested today on suspicion of paying public officials for information. Virginia Wheeler, 32, appeared at a south London police station by appointment to answer questions related to evidence sent by News Corporation's management standards committee to Scotland Yard. Sun publisher News International confirmed Ms Wheeler had been arrested in an email sent to its staff. A Metropolitan Police spokesman later confirmed a 32-year-old woman had been bailed to a date in May. Ms Wheeler had been abroad on extended leave in recent months, a source said. Police are understood to have wanted to question her for several weeks. She becomes the 23rd person to be arrested by officers working on Operation Elveden. Ms Wheeler is The Sun's first female defence editor and reported from the front line in Libya last year. The arrest was made under the Prevention of Corruption Act 1906 on suspicion of aiding and abetting misconduct in a public office (contrary to common law) and conspiracy in relation to both offences. Operation Elveden - which runs alongside the Met's Operation Weeting team - was launched as the phone-hacking scandal erupted last July with allegations about the now-defunct News of the World targeting Milly Dowler's mobile phone. It has now widened to include suspected corruption involving public officials, as well as police officers. A Met Police spokesman said: "Detectives from Operation Elveden have today arrested a 32-year-old woman by appointment on suspicion of corruption under the Prevention of Corruption Act 1906 and aiding and abetting misconduct in a public office (contrary to common law) and conspiracy in relation to both offences." Ms Wheeler's arrest in connection with Operation Elveden follows those of 10 other former or current employees at The Sun. District editor Jamie Pyatt, 48, was the first to be arrested in November, while senior employees Chris Pharo, 42, and Mike Sullivan along with executives Fergus Shanahan, 57, and Graham Dudman were detained in January. The tabloid's deputy editor Geoff Webster, picture editor John Edwards, chief reporter John Kay, chief foreign correspondent Nick Parker, and news editor John Sturgis were then arrested last month. A serving member of the armed forces, a Ministry of Defence employee and a Surrey Police officer have also been detained in connection with the investigation. All were later bailed pending further inquiries. Their arrests led The Sun's associate editor Trevor Kavanagh to launch an attack on police, claiming his colleagues had been treated like "members of an organised crime gang". Former News of the World crime editor Lucy Panton, who is married to a Scotland Yard detective, was also arrested as part of the investigation into the paying of police officers in December. Others questioned as part of the inquiry include former News International chief executive Rebekah Brooks, ex-Downing Street communications chief Andy Coulson, former News of the World managing editor Stuart Kuttner, and the paper's former royal editor Clive Goodman. The latest arrest comes as former police chiefs were giving evidence at the Leveson Inquiry today. Peter Clarke, former head of the Met's counter-terror division, and John Yates, who was forced to resign as assistant commissioner over the phone-hacking scandal, were questioned while Andy Hayman, the officer in charge of the original hacking investigation in 2006, was also due to appear.
