News from U.S.A On City Limouzines Fraud

27TH MAY 2010

NEWS FROM USA

Limo Deal Called Tip of an Iceberg By DAN MCCUE

(CN) - An Indian woman living in Florida on a work visa embezzled and laundered $250 million a part of in an international scheme in which cars were bought in investors' names and hired out, three investors claim in Miami Federal Court. After promising returns as high as 48 percent, Chand Masood, "who had been on the run from authorities since August 2009," used the money to buy a $1.2 million mansion in Cocoanut Grove and other extravagances, according to the complaint.

The Rajput family claims that Florida companies City Trading and Chand Realty, both named as defendants, were used to continue the illegal activities of Chand Masood's husband, Sayed Masood, who was arrested in February on charges of operating numerous investment scams in their native India. The Rajputs say they invested nearly $376,000 in City Group Companies, a Masood shell company, based on promises they would be paid more than $1.6 million over the next 5 years.

The Rajputs say the Masoods used the money to invest in Florida real estate and laundered ill-gotten gains from India. "The activities of the Masoods and the City Group Companies have been the subject of much press coverage in numerous international newspapers, as is the India authorities' reported belief that more than Rs 1,000 crore - or about $250 million - fraudulently obtained from investors (including plaintiffs) were diverted to the City Group Companies in the United States run by defendant Chand Masood," according to the complaint. (Parentheses in complaint.)

The Rajputs say Chand Masood came to the United States in 2005 under the guise of working for the City Group Cos. and promptly set up City Trading LLC, a company purportedly involved in vehicle leasing, fleet management and hospitality services. Meanwhile, the parent City Group Cos. allegedly engaged in diamond, jewelry and garment exporting. The Rajputs claim City Group Cos. attracted investors by asking for a minimum investment of $3,000, with a promise of monthly payments for 5 years. Investors were promised they would break even after their seventeenth check was cashed, according to the complaint.

In addition to the vehicle leasing scheme, called City Limouzines, Chand Masood operated a second investment vehicle, City Realcom, which purported to invest in real estate. In this scheme, investors were told they would own a 20-square-foot piece of property for 5 years, according to the complaint. As in the case of City Limouzines, investors were told they would receive monthly payments for 5 years. The Rajputs say they invested in both companies, and did receive payments for a time. But last year the checks began to bounce; and ultimately, they stopped arriving all together.

In December 2009, police in Mumbai, India began to investigate the City Group Companies for fraud, the complaint states. As of April 4, 2010, the companies and their principals have been charged with "duping 25,000 investors who had invested in its various schemes promising high returns," the complaint states, citing an article of that date in The Financial Press. The Rajputs seek damages and court costs on claims of racketeering, money laundering, fraud and unjust enrichment. They are represented by John Marino and E.K. Cottrell with Fowler, White Boggs in Jacksonville, Fla. The defendants in this case are City Trading LLC, Chand Really LLC, and Chand Sayed Masood.

LEMON TV crew was at the rally for nearly 2 hours and did extensive coverage of the rally and interviewed a large number of investors including ladies. The video was shown extensively on lemon TV on 25th for the whole evening. Sahara NCR also covered the Rally and the video was shown on 25th evening on Sahara NCR channel for quite sometime. Unfortunately, lot of investors could not view these channels as these are not available on TataSky but only through some cable operators.

The TV crew from AajTak & Zee News kept calling me to say that their crew will be reaching the site to cover the event. However, we waited from 10:00 AM till 1:30 PM but they did not show up. Mr. Rick Westhead, South Asia Bureau Chief of TORONTO STAR was also at the rally at my request and covered the event and took lot of pictures as well. The reporter of Hindustan times was also present at the rally.

City Limouzines owner brought to city Hyderabad.

Staff ReporterPetition to be filed seeking his custody for questioning in 150-cr. fraud case

Masood's investors in Hyderabad about 14,600,He reportedly collected 3,700 cr. from people

HYDERABAD: S.M. Masood, owner of City Limouzines, who was arrested allegedly for duping thousands of investors across the country, including over 14,000 from Hyderabad, was brought here on Thursday on prisoner transit warrant.

The Hyderabad Detective Department officials produced him before a local magistrate who remanded him in judicial custody. They will file a petition in court seeking his custody for questioning him in the fraud case involving nearly Rs. 150 crore invested by people.

Advance cheques

Masood is accused of attracting investors by assuring Rs. 7,000 monthly return on a deposit of Rs. 1.4 lakh. He would give cheques for the returns in advance for six months. “Just pay Rs. 1.4 lakh and walk away with Rs. 7,000 every month by submitting the cheque given by me in the bank,” he used to tell the investors.

In case of inquiries from investors as to how he would secure the returns, he led them to believe that he would purchase different types of cars using the deposits collected and rent them out to corporate companies. Since he promptly paid the returns for the first few months to the investors, thousands jumped at the investment offer and deposited money.

He opened offices in different cities like Mumbai and Chennai. Everywhere, he did roaring business. Police said, on the whole, he collected over Rs. 3,700 crore towards investments. The number of investors in Hyderabad stood at 14,600, though this was far less compared to other cities.

Masood disappeared suddenly a few months ago leaving the investors all over the country shell-shocked. Cases were registered almost simultaneously in all cities. After evading arrest for few weeks, the Mumbai police succeeded in nabbing him in February last.

Hyderabad police brought him here to record his statement and ascertain details of deposits collected in Hyderabad.