Fri Jun 06 2014
Canadian who cracked Ponzi scheme in India wins court settlement
In the streets of Mumbai, Toronto’s Vedant Rajput was regarded as a modern-day Poirot .
Rajput is widely credited by many in the Indian city with helping to untangle a massive Ponzi scheme.
In 2010, The Star documented Rajput’s efforts to bring Sayed Mohamed Masood to justice. Masood, then 53, tricked more than 200,000 victims out of $250 million (US), police allege.
Masood’s scam was simple. His company, City Limouzines, purported to buy cars and run them as taxis. Investors who turned over $3,200 were given 60 postdated cheques of $175 a month, which totalled about $10,400 over five years. Police believe Masood actually bought fewer than 100 cars.
When City Limouzine’s cheques began bouncing, many investors were resigned that their savings were gone.
He organized rallies in Mumbai that attracted as many as 15,000 investors — becoming a celebrity thanks to local TV and newspaper coverage — and created and distributed complaint forms for investors to submit to police. He unwound City Limouzines’ corporate structure, explaining its cash flow to police. Rajput tracked down real estate that could be used to help repay claims to investors, and hunted down three of the company’s senior directors, including Masood himself.
When a U.S. court dismissed his complaint , Rajput appealed. The 11th Circuit Court reversed the district court's dismissal.
Four years later, Rajput’s story has a happy ending.
He contacted The Star by email this week.
“Just wanted to let you know that I finally settled with City Trading in Miami last week and recovered my entire investment plus more,” Rajput wrote in an email. “I had filed a civil case against the wife in Miami. I was able to gather so much damaging info about her and the companies that she had set up in Florida that she finally gave up. We had a mediation and she made an offer. After 12 hours of going back and forth, we settled. She wired the funds to my attorneys yesterday. On the Indian side, her husband, the kingpin is still in jail.”
Rajput said he couldn’t disclose terms of his settlement.
“All I can tell you is I was able to recover my entire investment plus more,” he wrote. “If you remember the scheme, they gave our checks and then it stopped. So all those checks that I received were a bonus.”
I asked Rajput the moral of his story.
“If something seems to good to be true, it probably is,” he replied.