DANIEL GORDON, the former president of energy trading at Merrill Lynch, claimed to have wealthy clients and produced an elaborate web of documentary evidence to assist with his $43 million (£27 million) theft from the bank, it has been alleged.

Michael Ritter, chief executive of Newport Pacific Financial, who claims to have been duped into setting up Swiss bank accounts and offshore companies by Mr Gordon, told The Times that he was sucked into the alleged fraud.

Mr Gordon is being investigated by Canadian and US authorities for allegedly embezzling $43 million. Mr Ritter is part of the investigation, but his lawyers said he was not under suspicion and had alerted the authorities to the alleged transactions.

“As far as I was aware, Mr Gordon was a broker representing two clients who had $43 million of liquidated assets that they wanted to move out of the US,” Mr Ritter claimed.

In reality, Mr Gordon was head of Merrill Lynch’s energy trading desk in New York and did not have individual clients.

Mr Ritter said: “I asked for notarised passports belonging to his clients. Merrill Lynch sent them. I asked for trading records proving that the $43 million worth of derivatives trades had in fact been unwound. We got boxes of documents which proved that was where the money came from.”

Merrill Lynch said: “Mr Gordon did not have individual clients as a broker would. If the allegations are correct you could say we were the victims in this case.”

Neither Mr Gordon nor Mr Ritter has been charged with any crime.