‘Women’s society,’ bank officials on list of suspects in money fraud scheme

Close on the heels of the Swiss Solar and Leeds Capital financial fraud schemes, another pyramid scheme has come to the notice of the district police.

The police said most victims of the suspected investment fraud were women from rural areas. The suspects in the alleged financial fraud were members of a ‘society for women’ and also the officials of a nationalised bank.

According to their complaint, the members of the ‘society’ had met scores of women in Neyyattinkara taluk early this year and encouraged them to form five- and seven-member self-help groups.

Each member of the group was persuaded to deposit Rs.3,000 with the ‘society’ in return for loans from the nationalised bank to start household-level mushroom and dairy farming projects.

Accounts opened

The society members opened accounts for several such groups with the bank. Its members were given the bank’s passbooks.

The members also had to deposit blank cheques, promissory notes, and stamp papers with the society as surety for loan from the nationalised bank, the petitioners said in their police complaint.

Scores of women received loans up to Rs.50,000, after ‘household inspection by persons who identified themselves as officials of the bank,’ a complainant said. Soon, several more started joining the scheme, which the society members aggressively marketed in the rural neighbourhoods. The society deducted Rs.5,000 from each loan as ‘processing charge and commission for bank officials’ and gave the rest to the ‘self-help groups.’

The leaders of the ‘self-help groups’ in turn collected the monthly mortgage payment, up to Rs.2,000 in most cases, from their members and deposited it in the society.

The alleged fraud came to light when members of the groups realised that their mortgage payments rarely reached the bank.

When they questioned the society members, they responded by writing exaggerated amounts on the blank cheques the group members had given them as loan guarantee, in one case Rs.10 lakh, and submitted them in the banks.

When the cheques bounced, the society members filed cheating cases against the women in courts and police stations.

Most of the petitioners hail from the lower economic stratum of society.

The society’s promise of a loan of up to Rs.1 lakh for an upfront payment of Rs.3,000 had many takers among such homemakers.

Many had availed themselves of the loan for their children’s education, marriage, and treatment expenses of their parents.

A complainant said that they met and petitioned Additional Director General of Police A. Hemachandran after their repeated complaints to the rural police “failed to yield any result.”