$5.4 Million Bluffs Lands Goldman Sachs’ VP in Jail on Fraud Charges

September 11th, 2019 | by Jason Reynolds

Goldman Sachs’ vice-president Ashwani Jhunjhunwala has been accused of stealing $5.4 million to pay off alleged poker debts.

Goldman Sachs’ Ashwani Jhunjhunwala (pictured left) and Vedanth Rungta have been accused of stealing $5.4 million to pay off poker debts. (Image: Bangalore Mirror)

Breaking on September 10, the news will come as a blow to poker’s image in Jhunjhunwala’s native India.

According to police reports, Jhunjhunwala, who was based at the financial firm’s Bengaluru office, had debts of more than $130,000.

Desperate Play to Cover Poker Debts

Despite taking out personal loans, the VP of forex and equity settlements needed more.

“He was defaulting on repayments and he was under severe pressure from lenders. He made several attempts to have the bank loan enhanced last month, but the bank refused,” an investigating officer told The Times of India.

As per the police report, former colleague Vedanth Rungta told Jhunjhunwala there was a way to defraud the company. Suggesting it was foolproof, Rungta provided the supposed solution in return for $400,000.

Although the specifics of how Jhunjhunwala pulled off the heist haven’t been revealed, officers have said he manipulated three employees.

To start, Jhunjhunwala allegedly told Gaurav Mishra, Sujith Appaiah and Abhishek Yadav he needed access to their computers. From there, reports suggest he got Mishra to set up a settlement reconciliation service.

Owing to Mishra’s inexperience, this request went unquestioned. With access to multiple systems and a payment mechanism in place, it’s believed Jhunjhunwala was able to make the switch.

Goldman Sachs’ internal security team were alerted to an issue after two large transactions were made on September 6. After an investigation, it emerged that $5.4 million had been siphoned from the company’s accounts in less than 10 minutes.

Arrest Could Hurt Poker in India

Jhunjhunwala was arrested on September 10 by Bengaluru police officers. He’ll now face charges relating to fraud following a full investigation.

While the financial expert may be in a tough spot, his antics could hurt poker players across India. In a number of regions, poker is still illegal and regarded as a social taboo.

One state that bucked the trend in 2016 was East Bangalore. Following a ruling by the Bengaluru High Court, poker was classed as a game of skill and, therefore, legal.

It’s this ruling that allowed Jhunjhunwala to play online poker where he lived in East Bangalore.

Although the actions of one man are unlikely to reverse the court’s decision, some may see it as a betrayal of trust. Indeed, with the status of poker in India balanced on a knife-edge, a high-profile incident such as this could have devastating repercussions.

For now, Jhunjhunwala will have to answer for his alleged crimes. However, he may not be the only one that suffers in the long run.