Credit company loses ₹2.29-cr after fraud discovers a loophole

According to the Parksite police, the accused Anand Namdeo Utkar, ‘director’ of Webrock Innovations Private Limited, discovered a loophole in Nehat Tech Solutions private limited, a software system and exploited it

Mumbai: Director of a web designing company has been booked for allegedly cheating a tech (credit card) solution company affiliated with State Bank of Mauritius, to the tune of ₹2.29 crore.

Police suspect as the Japanese currency does not operate in decimals; this loophole got developed in the system. (Getty Images/iStockphoto)

According to the Parksite police, the accused Anand Namdeo Utkar, ‘director’ of Webrock Innovations Private Limited, discovered a loophole in Nehat Tech Solutions private limited, a software system and exploited it.

Nehat Tech Solutions is affiliated with the State Bank of Mauritius and is entrusted with work such as finding new customers for the bank and also providing them with bank credit cards. The bank has authorised Nehat Tech Solutions private limited to issue bank credit to the customers and also manage their accounts.

As per the police complaint, in 2018-19 Utkar had taken the credit card of the State Bank of Mauritius. Using the credit cards Utkar would do online shopping and buy domains on foreign e-commerce sites such as GoDaddy, Amazon, etc. and would make the payment in Japanese currency Yen.

However, due to a certain loophole in the software system on buying a product worth 100 Yen, only ₹00.66 were deducted from Utkar’s credit card account (instead of ₹66.00 as per the current market value of Yen). But instead of ₹00.66, ₹66.00 were being deposited in the Visa company’s account and this amount would further be paid to the Japanese product seller on the eCommerce site, the police said.

Police suspect as the Japanese currency does not operate in decimals; this loophole got developed in the system.

Utkar exploited this loophole and after placing the online orders would cancel the same. And when the Japanese seller would revert the order’s amount to Visa company and then to the Credit Card company, Utkar would be refunded as per the prevalent ₹66.00 (equivalent to 100 Yen).

The complainant executive of Nehat Tech Solutions private limited stated in the FIR that Utkar used 29 of the 60 credit cards issued to the company between November 24, 2021, to February 28, 2022, exploiting the loophole in the system and making thousands of purchases and cancellations and earned back 100 times more money than the amount debited from his credit card accounts.

The accused made his relatives bogus vendors and transferred the money to their accounts. He also transferred money into his own and other relative’s bank accounts. Using this fraudulent method Utkar allegedly defrauded the complainant company of a total of ₹2,79,62,940, the FIR stated.

When the complainant company discovered the fraud, they asked Utkar to submit documents of transaction details of his credit card purchases. “Utkar on March 28, 2022, visited the complainant company’s Vikhroli office, submitted transaction details and admitted to having been wrongly benefitted. Utkar gave a written assurance to return ₹2,79,62,940 in phase wise manner and later also submitted seven post-dated cheques. On March 31 Utkar deposited ₹50 lakh in his credit card account,” a police officer said.

On April 11 Utkar visited the complainant company’s office and had a verbal spat with the executives and threatened them and refused to return the rest of the amount.

Later when the company made inquiries about Utkar they learnt that on March 15, 2020 Utkar had resigned from the director’s post at his company and now his brother Arjun Utkar and his wife Megha Arjun Utkar are directors. Utkar is 99% shareholder in the company while his brother Arjun is 1% shareholder, however, Utkar remained the driving force behind the company.

“Despite resigning from the company’s director’s post Anand Utkar posing as company director availed Corporate Credit Card in April 2020 and further carried out the alleged fraud,” said another police officer requesting anonymity.

The complainant company on Friday filed an FIR against Utkar. “He has been booked under sections 420 (cheating) and 406 (criminal breach of trust) of Indian Penal Code. We are in the process of collecting documents and information from the concerned companies. No arrest has been made in the case yet. The investigation is on,” said Vinayak Mer, senior inspector of Parksite police station.