Prasad began life of fraud with US loans
Bribed bankers, forged documents to obtain loans
Ponnapula Sanjeeva Prasad, or ‘Goldstone Prasad’, the mastermind behind the `587-crore Miyapur land scam, has a shady history not only in India but even in the US, where he accumulated his early wealth by defrauding at least five banks in the late 1980s and early 1990s. In fact, he is still a fugitive from American law.
The most notorious case that has come to light is one in which Prasad bribed Baji A. Palkhiwala, a former head of the Bank of Credit and Commerce International (BCCI), with $250,000 to obtain millions of dollars in loans, which he used in illegal ways.
According to a report filed by former Manhattan District Attorney Robert Morgenthau with the New York State Supreme Court in 1993, Prasad, his brother Murali Krishna Ponnapula and others fraudulently obtained $27 million in loans from five banks in the US, including BCCI.
The report said that Prasad used the money to buy controlling interests in two corporations in US. He and his brother were indicted on charges of grand larceny, a felony carrying a maximum penalty of eight to 25 years in prison. But Prasad escaped to Hyderabad before he could be arrested, and began a saga of shady land deals, lying low himself and running businesses in the name of his wife and daughter.
But with the outing of the Miyapur land scam, all his previous activities and the companies he floated have come under the scanner of the investigating agencies.
As per Morgenthau’s report, Prasad was the mastermind behind the frauds in the US. He obtained loans by bribing officials of the banks, lied about the intended purposes of the loans and the financial status of the borrowers, and fabricated several documents. “$16.8 million was obtained by the trio from BCCI; $5.9 million from Bank of India; $1.4 million from State Bank of India; $1.5 million from Bank of Oman Ltd.; and $2.5 million from Branch Banking and Trust Co. of Greenville, N.C,” the report said.
“Besides bribing Palkhiwala, he also paid a bribe of $100,000 cash and an ownership interest in a Tennessee hotel to Shahbaz A. Raheem, formerly BCCI's chief credit officer.