How Britain's biggest fraudster stole – and squandered – £115m

Sports stars, celebrities, businessmen and even bankers with one of the world's leading financial management companies were conned out of £115m by the ringleader of Britain's biggest ever "Ponzi" scheme, it can be revealed.

Police said Kautilya Nandan Pruthi operated "a spider's web of corruption" that stretched around the world as he won the trust of hundreds of victims by promising huge returns on investments. In just over three years the flamboyant fraudster netted £38m, which he spent on multimillion pound homes, Ferraris and private jets.

The former cricketer Darren Gough and Jerome Flynn – one half of the pop-duo Robson and Jerome – were among 800 people who fell victim to the man police described as Britain's most prolific fraudster.

"Pruthi used fast cars, helicopters and luxury houses to create an illusion of success and legitimacy," said Detective Superintendent Bob Wishart. "In reality he was a cold-hearted criminal driven by greed, with an unquenchable desire to steal and spend."

Parents of disabled children and a host of undisclosed well-known names also fell victim to the scam. Even bankers with Merrill Lynch were duped into believing Pruthi's lies. The full details of the staggering fraud were made public yesterday after the conclusion of the trial of two of Pruthi's associates.

John Anderson and Kenneth Peacock were found guilty of unauthorised regulated activity but cleared yesterday of fraud and recklessly making a misleading, false or deceptive promise.

Before the trial, Indian-born Pruthi pleaded guilty at Southwark Crown Court in London to four counts of obtaining money transfers by deception, one count of participating in a fraudulent business, one count of unauthorised regulated activity and one of converting and removing criminal property.

He was arrested with his two associates in May 2009 after City of London police launched a nationwide investigation into Ponzi fraud. By the time of his arrest, Pruthi, 41, had already spent much of the cash during half a decade of luxury living. He blew hundreds of thousands of pounds a month renting homes in central London and a mansion in Ascot. He also bought Bentleys, a Ferrari, a Jaguar XKR, a Maserati and even a private jet.

Det Supt Benjamin Flannaghan, who led the City of London police inquiry, said Pruthi was a "flashy operator". He added: "He always wore a cravat and only wore brightly coloured clothes and suits."His own defence counsel said in court that he was "mesmeric".

Pruthi began taking deposits from investors around the world in 2005, offering a headline return rate of 156 per cent per year on investments. Investors from Britain, Australia, Singapore, Hong Kong, Thailand and Spain were eventually lured into parting with their cash.

Pruthi, of Wandsworth, south-west London; Anderson, 46, of West Hampstead; and Peacock, 43, of Camberley, Surrey, were all made bankrupt after their arrests. Judge Michael Gledhill QC, who sentences the three tomorrow, has warned Pruthi a jail term is "inevitable".