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US scam points to huge India network

Varang K Thaker, the payday scam kingpin busted by US authorities on Tuesday, might be just the tip of the iceberg that points to a larger scandal emanating in India. Yashwant Raj reports.

business Updated: Feb 23, 2012 21:52 IST
Yashwant Raj

Varang K Thaker, the payday scam kingpin busted by US authorities on Tuesday, might be just the tip of the iceberg that points to a larger scandal emanating in India.

Some investigators believe the scandal itself could have originated in India, and could be the handiwork of an Indian or a group of them.

The US Federal Trade Commission has sought the help of Indian law enforcement to nail the Indian end of the scam, with the first exchange of notes taking place on Wednesday.

“It is possible there are more people involved in this in India,” said Steven Baker, director of the FTC’s midwest region, adding, “It’s possible that the scam was born in India.”

While these are early days, all available evidence does point to a larger involvement of Indians based in India — and not all in Ahmedabad, said people close to the investigation.

Thaker is the first catch for a crime trend that took off roughly around the time the US went into recession.

The FTC does not know much about Thaker except that he is an Indian citizen and “holds an Indian passport”. He is in his late 40s and owns a Mercedes Benz ML-350. Thaker’s operations were run by two California-based companies — American Credit Crunchers and Ebeeze — using call centres in Ahmedabad to pursue victims in the US. Thaker used personal details of Americans who had taken short-term loans expected to be repaid on the next payday, and had the Ahmedabad call centre make them threatening phone calls. The callers would threaten with arrest or worse. Most victims paid up.

But their money was never passed on to the lenders. Some people paid even though they did not owe anything.

The money was not owed to Thaker or his companies, nor were they authorised by lenders to collect those loans on their behalf. They were just cheating.

Thaker reportedly did not deal with the call centres himself, going through a company, which will not be named as we could not contact it to check the allegations. The Ahmedabad call centre made 8.5 million calls to victims in the US over just four months. This and other efforts are alleged to have netted Thaker $5 million.

FTC investigators said they now believe there are other groups in India that might be involved in a similar scam, which has swept through the US, causing countrywide alarm.

The FTC has received 4,000 complaints over the last two years. The FBI on Tuesday issued a countrywide alert, urging people to report suspicious phone calls from so-called debt-collectors.

“Our impression is that when someone comes up with a new scam, such as this, and makes a success of it,” said an investigator, “copycats spring up all over.”