In Depth | Chip scam dries up: Thane Crime Branch busts a nationwide racket

In February this year, when 35-year-old Ami Sheth raised concerns, on Facebook Live, over short delivery of petrol at a fuel station at Charkop, little did she or anyone know that rigging of fuel could be a multi-crore scam with links across several states. On February 28, Sheth went live on Facebook alleging that despite asking for a full tank, her vehicle's fuel indicator did not show as full.

In May, a Special Task Force of Uttar Pradesh (UP) police busted a racket wherein petrol dispensing units were found to be tampered with, resulting in lower delivery of fuel to customers. Their probe revealed that the engineer of the said fraud was based in Mumbai's neighbouring city, Thane.

The Thane police then followed up the leads provided by their UP counterparts and unearthed a racket that now runs into several crores. The probe revealed that the scam was in operation for the past 10 years, but neither the customers, nor the government agencies ever got a whiff of it.

So far, the Thane Crime Branch has raided 96 petrol pumps in Maharashtra, of which 56 were found rigged with software programmes, and 156 dispensing units were sealed. The police have seized 195 pulsar cards, 22 sensor cards, 71 control cards, and 61 keypads from petrol pumps in Maharashtra.

In the past two months, Thane police have arrested 23 persons of which eight are owners and managers of different petrol pumps, 12 are technicians of fuel dispensing unit manufacturing companies and three are software engineers involved in tampering dispensing units.

Thane crime branch raiding petrol pumps

Engineers of the racket

According to the police, the alleged mastermind of the scam — Vivek Shetye, 47 — was arrested in May this year, from Dombivli by Thane Crime Branch, and handed over to the UP Special Task Force (STF) for his alleged involvement in the petrol pump scam busted in UP. Shetye, who holds a Masters degree in Science (Electronics) allegedly provided software-enabled micro chips, which controlled the supply of fuel in the dispensing units through remote controls, in UP and other states. The Thane police later took Shetye's custody from the UP police for further interrogations.

"A common man would never be able to gauge that he has been duped by those involved in this racket, who are basically technicians and engineers. For a common man, or oil companies it is next to impossible to ascertain if a unit has been rigged," said a Thane crime branch officer.

On July 12, the Thane Crime Branch arrested Prakash Nulkar, 49, from Hubli, Karnataka. Nulkar is one of the accused, who imported original chips, to rig fuel dispensing units, from China and then sent tampered chips to China, South Africa, and Abu Dhabi. The police are now investigating if the racket was operative in other countries as well.

Tampered circuit seized by Thane police

Cheating with chips

After the companies sell dispensing units to a dealer, a private technician or an employee from the dispensing unit manufacturing company approaches the dealer to help him earn extra bucks by controlling the fuel supply. The control card attached with the dispensing unit is then rigged with its Integrated Circuit (IC) after connecting it to a cable wire and laptop, from which a pirated programme is uploaded and activated after entering a four-digit password. This programme can be manually controlled with a remote sensor.

"After the programme is activated, the petrol pump owner shortchanges customers by one litre fuel of every five litres supplied. We have also found that petrol pump owners have supplied two and a half litres instead of five litres. This modus operandi helped the petrol pump owners earn more money than the expected margin," said the officer. Shetye was at the forefront to contact petrol pump owners.

"We have also found that the seal attached by the Legal Metrology Organisation (LMO) on the dispensing units were tampered with, and were replaced with a duplicate seal. This would make it impossible for the inspecting authorities to ascertain if the dispensing unit was tampered or not," said a senior Thane crime branch officer.

Interstate scam

According to the police, employees from companies that manufacture the dispensing units charge Rs 5,000 to Rs 15,000 from a single petrol pump owner for tampering with the units, and a private technician charges between Rs 3,000 to Rs 10,000 for the same.

"The earnings of petrol pumps depended on the number of consumers visiting the fuel station on a daily basis. We will be collecting the details of petrol pump owners and their assets as we suspect they have invested the ill-gotten money in properties too. During the raids, we also found that many petrol pump owners have shut down their business and fled," said a senior crime branch officer.

Meanwhile, Shetye and Nulkar are in the police custody of Thane Crime Branch. The activities of petrol pump owners in Palghar, Latur, Jalna, Beed and Nanded are now being closely monitored. "We will continue the raids in the state as and when we get information. We are aggressive to curb such incidents of shortchanging consumers. This appears to be an inter-state racket," said Param Bir Singh, Commissioner of Police, Thane.

Vivek Shetye (centre) otuside Lukcnow jail after taken in custody by Thane Crime Branch

LMO officials under scanner

Though the Thane Crime Branch has given a clean chit to oil companies in the said racket, officials from the LMO have come under the scanner. During the raids, police officers found that the LMO officials were allegedly hand-in-glove with the petrol pump owners, and were receiving monetary benefits. During the routine examination of the petrol pumps by the LMO, a few petrol pumps were found rigging the dispensing units but were dealt with a blind eye by the LMO officials, police said.

"The corrupt LMO officials were paid monthly bribe by the petrol pump owners for not taking any action against them as they continued to cheat consumers. We are collecting evidence against such officials and a report will be sent to the State Controller of LMO," said a crime branch officer on condition of anonymity.

"The involvement of oil companies has not been found during investigations, and they were not aware about such a scam being operated on a large scale in Maharashtra," said the officer.

Amitabh Gupta, Controller for LMO, said, "We have so far not been informed about such LMO officials suspected to be involved in the racket, but if we find any irregularities in the working of our officials, strictest action will be taken against them."

The five-litre fuel test

The LMO has issued a Citizen's Charter making it mandatory for petrol pump owners to keep a measure of five litres, which is stamped and approved by the LMO at each petrol pump in the state, on the basis of which a consumer can himself/herself pour five litres of fuel from the nozzle of the dispensing unit at the fuel station to check the supply. After the test, the petrol pump owner will pour the fuel back inside the fuel tank. The LMO approves 25ml less fuel from five liters of fuel dispensed from a unit. The five-litre test is free of cost.

"It is the right of a consumer to check the supply of fuel through the five-litre test measure and find out if the petrol pump owner has shortchanged the consumer. We have instructed petrol pump owners to inform the consumer by putting up a notice about consumer rights," said LMO Controller Amitabh Gupta.

"We conduct regular checks. If we find that units are tampered then the units are not allowed to be used by the fuel station without our permission. But if we find the dispensing unit supplying less fuel above 25 ml in five-litre measure then we serve a notice to the petrol pump owner for recalibrating the dispensing unit," said Gupta.

Petrol pump association demands stern action

The Petrol Dealers Association took cognizance of the petrol pump racket busted by the Thane police. "The persons involved in tampering the units were not the members of our association. We are ready to co-operate with the police during investigation, and we have directed our members not to indulge in such malpractices. We practice fair trade and we have confidence in our members that they will not indulge in unfair means to earn money," said Ravi Shinde, President of Petrol Dealers Association.

"It is due to few petrol pump owners that we are being defamed, but we try our level best to win the confidence of the consumers. Since the petrol pump scam has been busted, all the petrol pump owners are being blamed," said Shinde.

Mumbai consumer body applauds police action

Mumbai Grahak Panchayat, a consumer rights forum which fights against the injustice meted out to consumers has applauded the Thane police for taking strict action against the petrol pump owners for cheating consumers. "We are happy that the police stood up firmly to protect the interests of consumers by busting the petrol pump scam in the state," said Ramdas Gujarathi, President of Mumbai Grahak Panchayat. "The consumer is in a hurry to refuel his vehicle when he reaches the petrol pump, and is unaware that he has being cheated. Moreover, the consumer believes that the petrol dispensed in vehicle is equivalent to money paid," said Gujarathi.

"The petrol pump owners should ensure that the rights of consumer is actively promoted at the petrol pumps, and if necessary can themselves check the delivery of the fuel," added Gujarathi.

TAMPER OPERATORS

• According to the police, employees from companies that manufacture the dispensing units charge Rs 5,000 to Rs 15,000 from a single petrol pump owner for tampering with the units.
   
• A private technician charges between Rs 3,000 to Rs 10,000 for the same

STEP 1
Petrol pump owner contacts dispensing unit manufacturers or private technicians to repair the dispensing unit by claiming it to be malfunctioning.

STEP 2
Technician installs Integrated Circuit on the dispensing unit which is connected with the pulsar. Technician enters 4 digit password on the keypad. The sensor board on the control card functions as per the fake programme which has been rigged on the integrated circuit.

STEP 3
Dispensing unit is controlled by a remote control by the petrol pump owner. On its activation, the sensor card reads instructions and the fuel supply is decreased.

STEP 4
When a customer refuels his vehicle, the petrol pump attendant resets the dispensing unit, enters the amount given by the consumer. But due to tampered dispensing unit delivers less fuel inside the vehicle. The consumer leaves the petrol pump without knowing that he has been cheated.