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Fraud continues to be unearthed in the financial sector with police recently detecting one of the UK's biggest Ponzi schemes, according to several media reports.
City of London Police claimed that the alleged £80 billion ($132 million) fraud was so convincing many of its 600 victims cannot accept they have been scammed, reports said.
According to the Telegraph newspaper, the criminal investigation is focusing on Business Consulting International (BCI), a finance firm based in the upscale London area of Knightsbridge and several companies linked to it.
Police suspect a gang of men ran a fraudulent and unregulated investment scheme offering returns of between 6 and 13 percent a month for up to four years, the newspaper stated.
It claimed the dividends were generated by lending to struggling companies which were willing to pay high rates of interest on loans. In reality the original investment funded the payments.
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The scheme came under scrutiny when clients alerted financial authorities after some payments were missed. The Financial Services Authority (FSA) looked into suspected regulatory breaches before handing the case over to the police.
Three men have been arrested and remain on bail. They have been questioned on suspicion of conspiracy to defraud, money laundering and fraud by misrepresentation.
Officers have seized assets worth £1 million, as well as £250,000 cash and £800,000 worth of prestige cars but are racing to track down the missing money which is believed to be held in Dubai, the Cayman Islands and Thailand, the Telegraph said.
Police told the newspaper several alleged victims have already lost their homes, declared bankruptcy or committed suicide.
Some investors have accused police of speeding up the collapse of the firm by freezing its assets, reports said.
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