A few minutes more and 35-year-old Virendra Rastogi, of London's Portman Square where he lives in a luxurious flat, would have been on a flight to Dubai to attend a family funeral. Or so he thought. With a net worth of $235 million (Rs 1,130 crore), he was considered one of the richest British Asians. But detectives of the fraud squad got into action. With his Indian passport revoked, Virendra applied for a travel document. That alerted the British police, leading to the dramatic arrest of the chief executive of RBG Resources at the airport. They charged him with defaulting on loans worth over $600 million and with perverting the course of justice by shredding crucial documents last year, acting on an investigation that has been in progress for the past nine months.

END OF A CYCLE: Ravindra in DBI custody

The arrest of Virendra in late February is one of the biggest criminal investigations undertaken by Britain's Serious Fraud Office (SFO). The SFO was examining allegations that metal trade worth $648 million was fabricated by RBG Resources-a metals and minerals producing company with a turnover reportedly of $1.1 billion in 2000-and later used as collateral for loans from banks.

Fraud is nothing new to the Rastogi brothers, who rose from humble middle-class moorings in Delhi's Sadar Bazar and graduated from city colleges. The four-Ravindra, Subhash, Narendra and Virendra-had figured that exporting bicycle parts from India to the US, Russia, Hong Kong and the UAE would fatten their purses, especially if they substituted bicycle parts with scrap metal. On top of this, the fake consignments were audaciously overinvoiced up to 45 times their market rate.

With the money that came in, the brothers acquired copper mines in Romania and tin smelters in Bolivia and opened offices in New York, London, Shanghai, Singapore and Dubai. A note of the Central Bureau of Investigation (CBI), which is probing the case in India, says, "Investments made by the Rastogi brothers globally is likely to have come from the tainted money accumulated by the group from economic fraud committed in India."

CHAIN OF DECEIT The Rastogis set up a worldwide metal business. The money for this global empire came from fraudulent exports from India.

NARENDRA, 38: In custody in New York. An extradition request from India is pending before the US Justice Department. > His Allied Deals Inc. defaulted on a $20 million loan. FBI probing case.

VIRENDRA, 35: Youngest of the brothers, he was arrested by the Serious Fraud Office in London in February. Has to present himself at a police station three times a week. His firm, RBG Resources, defaulted on loans worth $600 million given by British financial institutions and banks. The loans were used to buy copper and tin smelters in Romania and Bolivia.

RAVINDRA, 47: Extradited from Dubai, where he ran a metal trading firm, by the CBI in mid-February. In judicial custody in India. While in custody in Mumbai, he was brought to Delhi by CBI and confronted with associates who ran his bogus export firms and operated 98 bank accounts in the capital. Has owned up to the fraud.

SUBHASH, 41: Was arrested by the CBI in September 2001 for illegally availing customs duty exemptions. Played a key role in perpetrating the fraud in India. Delhi court has ordered him to appear before it. Released on bail, he is stationed in Singapore. Required to present himself before investigating bodies.

The bicycle spares racket, which dates back to 1995-96, was at the centre of a Rs 43 crore export duty drawback fraud that the CBI and the Department of Revenue Intelligence of the Indian Customs have been probing for the past three years. Says S.C. Sinha, joint director, CBI, "The exports at exorbitant rates were done in collusion with customs officials, who certified the scrap as bicycle parts." Fourteen firms in Delhi and one in Mumbai run by the Rastogis were unearthed and 24 customs officials suspended regarding 1,200 such consignments. The CBI estimates the scam at Rs 5,000 crore.

The case got an impetus in mid-February when Ravindra, who ran the metal trading firm Waves Metco in Dubai, was extradited and produced at a Mumbai court. Subhash had been the first of the brothers to be caught-the CBI had arrested him in Delhi in September 2001. But when he was released on bail, he fled to Singapore. Then in May 2002, Virendra's brother Narendra, CBI of New Jersey-based Allied Deals Inc., was arrested by the FBI along with his three associates. The charges related to an alleged far-reaching scheme to defraud a number of international banks of $600 million.

P.K. Das, now joint director, intelligence, the customs official who first cracked the scam, followed the trail to Russia, where two import firms-Capella Plus and Inter Tech-were controlled by the Rastogis. Virendra looked after the Moscow operation, in which ill-gotten dollars were exchanged for Indian rupees. The rupees came back to the Rastogi firms in India as export payments. Moreover, the import value of the consignments was understated in Russia with the help of forged documents.

The web of fraud spread to America where Narendra set up the Allied Deals Inc. in New Jersey as a major importer of bicycle parts. When Allied Deals Inc. defaulted on a loan of $20 million extended by Dresdner Bank Latinamerika AG, the FBI began investigating.

The worst sufferers of the fraud will be the banks. Says Simon Casey, deputy editor of the magazine Metal Bulletin in London, "British banks could lose up to £275 million apart from banks in the UAE which have reportedly lost £44 million." A number of banks fear they may have lost up to $500 million that they lent to RBG. Some are understood to be Gulf-based, but RBG's biggest creditor was WestLB, the German financial services company. It is thought to have an exposure to RBG of up to $200 million. The bank, however, declined to comment. Gautam Sen, professor at the London School of Economics, says the banks too are to be blamed, "They get greedy and stop monitoring the companies when high returns are promised."

Meanwhile, the US Justice Department is looking into a request from India for the extradition of Narendra. While in CBI custody in India, Ravindra, who was extradited from Dubai, confessed that there were no bicycle parts to begin with and admitted to his role in the fraud. "Aap ko to sub kuch maloom hi hai, kya batana hai aap ko (You know everything. What shall I say)?" he told interrogators. On March 26, a Delhi court remanded him in judicial custody till April 23 and also summoned Subhash to appear before it. From non-existent bicycle parts to awesome riches to humbling lock-ups, the Rastogi story seems to have come a full cycle.

— with Ishara Bhasi