Fake IPL, the tip of the con consortium

The amusing ingenuity of the indigenous 'jugad' in faking an entire Indian Premier League (IPL) cricket series may have stoked the palate for juicy rib ticklers, but it represents just the tip of the iceberg in the country's march to international notoriety as a 'con' and crime hub.

Creating money out of mud' is blooming a business, they say in Gujarat. Thus the far-sightedness and earning acumen of the natives who conjured up an IPL environment in the rural confines of a Vadnagar village in north Gujarat and dressed it enough to con the gambling inclined and make them cough up cash in far-off Russia and the European Union, calls for a backhanded compliment, even if the crime cannot be condoned. The drool and drip of filthy lucre were incentive enough to boost the derring-do of the organisers who had lined up a year-long schedule when the rouble rush brought sniffing cops to the makeshift playground ending the innovative initiative.

Whether the con call centres, the bitcoin scams or the con-betting blitz - of which the fake IPL was but a tiny manifestation - the con consortium has spread its tentacles India-wide and is now a behemoth which can easily dwarf a large size corporate in India.

According to a US-based group researching the field, just one group of scammers on Telegram has 55,000 members in India. The group penetrated a fake call centre in Gujarat and found that it made US$18 million a year through such dubious means or US$ 60,000 per day, working six days a week. And if there are 55,000 members (fake call centres) scattered countrywide, the cash involved accumulates into an astronomically dizzying amount. Such is the cohesion within this group that when it was known that just one such centre had been penetrated, all the con call centres shut shop countrywide within minutes and did not open for almost a week. Thereafter, it was business as usual.

On May 9 this year, US-based YouTuber Mark Rober created a furore with a 26-minute video that exposed four call centres, three in Kolkata and one in Gurugram, as being key players in a scam that had seen 60 million people across the world swindled of almost US$ 20 billion in savings. Rober had collaborated with two other YouTubers and hacked into the offices of these call centres to unravel how they pulled off the scam and demonstrated it in graphic detail. The con-call scamsters impersonate officials from various government tax and commerce bodies and coax the victims into transferring money using the ploy of pending taxes or incorrect refunds. They were very well connected and exchanged data.

Again, according to a study by Truecaller, a Swedish company founded in 2009 to identify callers and now helps fight such crimes, nearly US$ 9.5 billion were stolen from 68.4 million American citizens by scam centres like these in 2021 alone. This means that one in three Americans report having fallen victim to phone scams, with 20 per cent more than once. The plight of the gullible targeted in other western countries is no better.

Technological innovations have not only speeded up communication and revolutionised businesses but also empowered the criminal ideator and enhanced their money-making reach across the seven seas. Thus, financially fortified scamsters, well versed in the ways of white-collar crimes, are more than a match for the grease-prone, short-staffed and hard-pressed police in the Indian states.

Weaponised for political and allied assaults, the Enforcement Department(ED), with its poor record of 5400 money laundering cases in 17 years and just 23 convictions, has all along been blind to this river of black money flowing unhindered, despite all the data available in the public domain. Or so it seems, for the agency, which is known to publicise its other forays, has hardly shown the same zeal in announcing these ever since the Prevention of Money Laundering Act(PMLA) was enacted in 2002 and came into force on July 1, 2005.

Every mesmerising model has a shadow side. Gujarat is no exception. It was in 2016 that it first came to light that a call centre racket operating out of India has been conning gullible Americans. Though initially detected in Maharashtra, it was Gujarat that emerged as the epicentre of this fraudulent operation which, at that time, was believed to have crossed an estimated US$ 500 million. From here, it soon spanned out countrywide.

Official agencies - of both the Centre and Gujarat- remained largely indifferent, with officers even complicit, until the American government brought matters to the notice of the Indian authorities. Five Ahmedabad-based call centres and 61 individuals were named in the initial indictment by the US Justice Department, which sought their extradition.
The modus operandi involved sending a voice mail regarding dues or tax lapses and providing a number to call back. After the targeted victim was chosen with care, he would be threatened with fines, imprisonment even deportation. The indictment stated that in one case, US$ 136,000 was extorted from a single victim in Hayward, California.

In fact, this was not the first instance of con-call centres being run from Gujarat. In February 2012, the US Federal Trade Commission (FTC) informed the Indian authorities that an Ahmedabad-based call centre had made 8.5 million threat calls in less than a year and conned American citizens of $ 5 million. The Ahmedabad cops remained cold to the lead.

Nothing much seems to have changed with the network still functioning from various parts of the state though the organisers, now financially sound, grease better. The Ahmedabad cybercrime branch had, on July 21, arrested a lone ranger who was on the job. He had been arrested in 2014 for running a con-call centre in the city and is facing charges.

High-profile cases become history once the heat wears off. The US$ 3 billion Gujarat bitcoin scam that scorched headlines for months began in 2017 when three persons impersonating income-tax officers had extorted 750 bitcoins worth Rs 400 crore from an investment company based in Surat. Investigating police officers had also come across information that the kidnappers also extorted an additional Rs 12 crore from a key person in the company.

The dirt hit the fan when property developer Shailesh Bhatt approached the then state home minister stating that he had been kidnapped by a group of policemen and forced to pay 200 bitcoin worth US$ 1.8 million for his release. Investigations by the CID revealed a bitcoin-based Ponzi scheme of epic proportions.

At the centre of the scandal that snowballed then was Gujarat promoted Bitconnect, a cryptocurrency firm that had recruited clients worldwide to deposit bitcoin and receive Bitconnect coins they could lend at interest up to 40 per cent per month. Bitconnect had denied any wrongdoing. The bitcoin price had soared from US$ 1000 to US$ 19,700 in the aftermath of demonetisation in November 2016. The head of investigations is on record stating that investors had poured in US$ 3.2 billion into Bitconnect. This coincided with the 60-day window provided by the government to ban high denomination currency notes or lose the amount. On June 4, 2018, the state of Texas filed a cease-and-desist order against Bitconnect with North Carolina following days later, even as the price of bitcoin crashed. Complaints about crypto-frauds began pouring in soon after. Congress termed it an over Rs 5000 crore scam and demanded an inquiry by a Supreme Court judge. Financial circles put the amount at many times more.

The high-profile case may have fallen off the media radar, but cryptocurrency scams continue with religious regularity. In February, the cybercrime cell arrested four persons in Ahmedabad for allegedly duping many on the promise of a higher return on investment in 'Tron' cryptocurrency. Lakhs were invested and lost.

Meanwhile, if hedge funds go to the Cayman Islands to incorporate, poker companies to Gibraltar, the emerging go-to destination for cryptocurrency companies seeking regulatory refuge from Asia are Malta, Bermuda, Gibraltar and Liechtenstein, where laws are being made more welcoming for them.

(R K Misra is a senior journalist based in Ahmedabad)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.