India's Central Bureau of Investigation (CBI) has charged the director of Zoom Developers for letter of credit (L/C) and other frauds that caused substantial losses for Indian Overseas Bank.

Vijay Choudray, who has already been jailed for his lead role in a US$400 million money-laundering scheme, now stands accused of cheating the bank's Juhu branch of the equivalent of around US$10 million.

Allegations

The CBI alleges that Choudhary, in connivance with another director Bihari Babu Kejriwal and vice-president Sharad Kabra, cheated the bank by submitting false information about overseas contracts awarded to their firm to fraudulently obtain several facilities.

These included six bank guarantees to the value of around US$9 million, L/Cs worth some US$8.3 million and term loans of US$1.3 million.

False information

Investigators further allege that Choudhary and others associated with his property development company deliberately inflated the value of the company's share capital.

They also allegedly diverted funds received against the L/Cs and bank guarantees and used the proceeds for other purposes, causing a loss of US$10 million to Indian Overseas Bank.

Choudhary is accused of having cheated at least 25 banks in the same way, causing a loss equivalent to around US$400 million.

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