Introduction
The Stamp Paper Scam or The Telgi Scam of 2003, is another scam that revealed the fragile nature of the Indian economy. The ramification of Telgi Scam spreaded in 18 states of India and the scam was estimated worth Rs. 20,000 crore. This scam was a big blow to the police system, politicians, regulatory bodies and bureaucrats. This stamp paper scam is another biggest national scam after the Scam of 1992 (Harshad Mehta Scam).
Mastermind Abdul Karim Telgi
Abdul Karim Telgi is the man behind the Stamp Paper Scam. This is the story of Telgi rising from rags to riches. Abdul Karim Telgi started his journey by selling different articles at different Karnataka Stations. Telgi completed his early education from neighborhood school Sarvodaya Vidyalaya and attended his B. Com degree in Gogte College of Commerce before moving to Mumbai for work. Telgi worked as Sales Executive at Fillix India and as Manager in Kishan Guest House.
In the 1980s, Telgi traveled to Saudi Arabia and stayed for 7 years. The interest of making huge money at a lesser time led Telgi to be involved in various illegal and illegitimate activities. Telgi started his journey to such activities by peddling counterfeit passports and other documents. With growing confidence and strong connections, Abdul Karim Telgi became the biggest fraudster of stamp paper, engraving his name in Indian history.
Telgi was a convicted Indian counterfeiter who printed counterfeit stamp paper. The multi-crore phony stamp paper case, which was made public in 2004, is claimed to revolve around him. He was convicted in 2018. The details of how one man managed to scam the Indian officials and public through stamp papers will be discussed in detail, below.
Beginning of the Scam
After returning from Saudi Arabia, Telgi started a travel agency named Arabian Metro Travels at New Marine Lines as a corporation to export labor to Saudi Arabia. Telgi started the counterfeiting business and focused on phony passports. He also used to make a variety of fictitious documents that would allow workers to pass through airport security without incident even if their passports were stamped with an ECR (emigration check required) or had other problems that may cause concern for immigration officers. In the language of labor exporters, this activity was referred to as “pushing.”
With his contacts in Saudi Arabia, Tengi was strongly involved in illegal boarding of labor to Saudi Arabia by counterfeiting passports and other documents. His first run-in with the police came in 1991 when the Mumbai Police detained the man – now identified as Karim Lala – on forgery and cheating allegations.
Alliance with Ratan Soni
In the year 1994, Telgi discovered an accomplice, another fraudster, Ratan Soni, in what would eventually become his future scheme, bogus stamp papers. A stamp paper is pre printed paper with a revenue stamp. This paper is widely used around the world to collect taxes on documents requiring stamping, such as leases, agreements, receipts, court documents and many others. This scam was related to the printing and making of fake stamps and stamp papers. Stamp papers were perpetually in low supply all across the country and hence in high demand.
In 1994, Telgi returned to the public after completing his sentence and obtained a permit for the enterprise. He then began to produce the stamp papers using equipment that had been deactivated by the Nashik Security press. Using equipment identical to those purchased at government auctions, Telgi built up a business to create fake stamp papers. He continued this over the course of the following 7-8 years. These bogus stamp papers were subsequently offered to institutional buyers at steep discounts. Other related items including judicial court fee stamps, notarial stamps, and even share transfer certificates. The clients of Telgi included financial institutions like banks, insurance providers, and brokerage houses.
When he started to counterfeit stamp paper, Telgi had advanced to more complicated forgery. He had hired 300 people to work as agents. These agents distributed the counterfeit goods to large-scale buyers like banks, insurance corporations, and stock brokerage houses. This swindle was worth over 100 billion (US$1.3 billion).
How was this scam managed
In 1994, Telgi and Soni used his connections to obtain a license to operate as a licensed stamp vendor. The business of Telgi and Soni expanded as a result of their multiple stamp paper frauds. In the 1980s, the demand for such stamp paper for legal purposes was high. There was low supply and high demand for the product. Also, stamp paper was not regulated well by the government. they cashed in on this opportunity.
Telgi would mix real and fraudulent stamp papers and sell the mixtures for enormous profit. Telgi entered a number of side companies after becoming wealthy from the phony stamp business. Soni and Tegi befriended politicians, ministers, bureaucrats and many powerful people to operate this business.
After Telgi and Soni split up in 1995, Telgi found himself in trouble once more when the Mumbai Police filed proceedings against him for selling counterfeit stamps, leading to the cancellation of his license. However, Telgi had acquired all the knowledge required to put up his own press by this point. By using his connections and hiring influential people, Telgi was able to establish his own press in Mumbai’s Mint Road in 1996. He was able to get multiple machines by leveraging his connections. Later, he purchased the equipment and set up his own press using it.
Telgi webbed a strong and wide network from politicians and vendors and offered them a huge commission for the work. His enterprise quickly expanded to other cities, and he attracted individuals to join him in his fraudulent sale of stamps and stamp papers. With such an aggressive approach, Telgi and Soni spread the business in 13 states and 74 cities with more than 170 offices and 900 employees. Several of them also applied to the registration of insurance and real estate documents. Telgi’s firm generated crores of rupees in the late 1990s.
However, without the cooperation of officials in several government agencies, the swindle would not have been conceivable. Telgi kept them content while amassing a sizable wealth that included numerous homes all around the nation. The fact that numerous police officers as well as other government personnel, including Nikhil Kothari, had to be involved in the scam was one factor that raised significant concerns. Despite earning only 9,000 (US$110) each month, an Assistant Police Investigator was revealed to have a net worth of nearly 1 billion (US $13 million). Many police officers were involved in this case.
The Arrest and Demise
In November 2001, Telgi was apprehended by police in Ajmer. His arrest happened after two guys got caught in Bengaluru in 2000 selling bogus stamp papers. The fraud had been discovered as a result of their arrest. The CBI eventually took control of the case. According to reports, Telgi allegedly owned 36 houses around the nation and more than 100 bank accounts in 18 significant cities.
2003 saw the filing of a lawsuit against Telgi by social activist Anna Hazare. The enormity of the scandal, which was estimated at a staggering Rs 20,000 crore, shocked the entire country. The other estimations ranged from 3,000 to 30,000 crores of rupees.
In the end, Telgi and a number of his friends were given a 30-year prison term and a punishment of Rs 202 crore in 2006. In October 2017, Telgi passed away at the age of 56 due to multiple organ failure in a public hospital in Bangalore.
Ironically, the Nashik Sessions Court absolved Telgi and six other defendants in the bogus stamp paper case a year after his passing since there wasn’t any “strong evidence” against them.
References
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