Rs 20 crore data conversion fraud busted

HYDERABAD: With the recent arrest of C Suresh, Vinsri Infotech managing director, on charges of duping more than 1,500 people to the tune of Rs 20 crore in Secundrabad, the Central Crime Station (CCS) investigators have managed to crack the whip on the fake data conversion companies. In the unending series of financial frauds being perpetrated in the State capital, data conversion has come up as a way to cheat depositors. The CCS has already registered six cases of such frauds in the recent past. The police have also identified at least 20 more fake data conversion companies after Vinsri Infotech Limited downed its shutters.

According to CCS DCP M Satyanarayana Reddy, the modus operandi of the fake data firms is to convince the depositors of offering data conversion projects by accepting lakhs of rupees as deposits. Next they assure the depositors that they had tied up with foreign firms. "Initially all these fake firms clear the bills of the depositors. It is only after sometime that these companies show their true colors. After collecting huge sum of money, they close down and vanish into the oblivion," Reddy said.

During the investigations the police found that while Suresh had started Vinsri in 1997, he got into the lucrative data entry business in January 2002 and pocketed a cool Rs 2 lakh to Rs 2.5 lakh non-refundable deposit from each client promising them to give data entry work. The company provided services for data entry of novels, medical transcription, management and e-Books and paid Rs 30 crore of the Rs 46 crore deposits towards the bill for the data entry work.

The company, which appeared to have been sailing smoothly, ran into rough weather in February 2003 this year when cheques issued by Suresh were dishonored due to non-availability of funds. "We used to get our money on time and it is only in the month of February that they started to cheat on their clients," says, Vasudev Rao, a client for Vinsri Infotech. Soon others started demanding that the company either provides work and clear the bills, or refund their deposits. When Suresh failed to respond, the clients approached the police and lodged separate complaints. Subsequently, he was arrested.

According to a police spokesman, Suresh had opened seven branches in the city and those who in-charge of these branches operated as brokers in getting the deposits. The brokers even collected Rs 10,000 to Rs 50,000 from each client for getting them data entry work. "We started our investigations after complaints of non-payment and the information that the company was on the verge of being closed," informed Reddy. Investigations also reveled that Suresh had floated another company, Sites Infotech Pvt Ltd on the same premises and both these companies were operating this racket concurrently.