GOOGLE, the internet search engine, has become the subject of a $3 million (£1.68 million) share-selling scam just months before it is to list in New York.

Yesterday, Shamoon Rafiq, from the Netherlands, pleaded guilty to conning five investors out of $2.8 million, by selling them non-existent shares in Google. Victims included a lawyer for a European telecoms group, the chairman of an unnamed global telecoms company and an investment banker.

Rafiq, who was in New York working as a British Telecom business development manager, claimed to be a venture capitalist and a college friend of Google’s founders, Sergey Brin and Larry Page.

He told investors he could offer them Google stock in a special “Friends and Family” scheme, but the scam fell apart when the banker grew wary and asked for his money back.

Rafiq had spent much of the proceeds in a three-month spree. He spent $350,000 on fancy restaurants, five-star hotels and gambling in Atlantic City. He lavished $100 tips on waiters at Nobu in London and Pastis in New York.

Rafiq, who does not know Mr Brin or Mr Page, could serve up to five years in jail after agreeing to assist the authorities, two years less than the maximum if he had been found guilty at trial.

Google has applied to float, but is yet to issue shares. It is to sell up to $2.7 billion of them.