Karnataka CID arrest 5 in Rs15.68 crore fraud credit transaction

The Criminal Investigation Department (CID) police have arrested five persons, including a woman, for allegedly carrying out 995 fraudulent credit card transactions worth Rs15.68 crore.

The police have seized Rs4 crore in cash, three cars and property documents from the accused. The total value of the seized items is estimated at Rs9 crore. The five accused, who belong to Salve Regina Charitable Trust, are accused of receiving 995 contributions between July 1 and August 13 in 2010, by illegal means. The accused managed to transfer funds to the trust’s account by accessing the credit card details of foreign nationals, mostly Americans.

The accused have been identified as Regina Seelan, 53, president of the trust, Victor D’Souza, 52, the treasurer, Christy Solomon, 40, a trustee, Thomas P Joseph, 43, secretary and Selva Babu, 42, who designed the website to facilitate fraudulent transactions.

The trust, said the CID police, purchased the credit card details from a website.

It paid as low as $4 to get details of some of the accounts used for online transfer. The highest-priced ones were bought for $32.
Seelan, along with six others, set up Salve Regina Charitable Trust in Hanumanthanagar in March 2005. The objective of the trust was to take up programmes for the cause of the disabled, elderly persons and others.
Gateway to crime

The trust obtained permission from the ministry of home affairs to accept contributions under the Foreign Contribution Regulation Act on April 22, 2009. It launched a website — www.src-trust.org — to receive donations from overseas countries. The website was designed by Babu, proprietor of V-Cube Technologies, Chennai.

In June 2009, the trust approached the Merchants’ Services Wing of Standard Chartered Bank, Chennai, for an e-commerce gateway facility to receive foreign funds. The trust received about Rs15 lakh through online transfer of money in 2009. The bank terminated the e-commerce gateway in December 2009 after observing that the trust was collecting funds entirely from foreign credit cards and there were a large number of chargebacks on the credit cards.

The revival
In March 2010, the trust managed to get approval from ICICI Merchant Services, Bangalore, to avail e-commerce gateway facility. There was minimum activity in the first three months after opening of the account. However, Rs15.68 crore was credited to the trust’s account from July 1 to August 13, 2010. The victims in the US and other countries approached their respective banks after learning about the unauthorised transactions from their accounts.

The banks took up the issue with ICICI. The Merchants’ Services Division of ICICI stopped the e-commerce gateway facility extended to the trust. An amount of Rs2 crore was available in the trust’s account when it was frozen. The bank lodged a complaint with the CID on September 9, 2010.

The CID investigation revealed that the fraudulent transactions were carried out from seven IP addresses in India. Out of these, two were traced to Babu and Seelan.

Properties seized
The police said that Seelan had bought 11 properties worth Rs9 crore in Bangalore East taluk in the name of the trust from the money he made through fraudulent means. The documents related to these properties have been seized.

The police have seized three four-wheelers from the accused. Other incriminating documents, hard disks and laptops have also being seized. The police said that the calls made by the accused persons are being analysed. All the bank accounts held by the accused are being scrutinised. Shankar M Bidari, director general of police, CID, said that the accused were arrested for violating the provisions of the Foreign Contribution Regulation Act and IT Act.

They are also charge under the provisions of Section 420 of the Indian Penal Code.