A single trader defrauding different banks of nearly Rs.6 crore using fraudulently acquired card swiping machines is no doubt an interesting white collar crime.
The modus operandi adopted by the accused, Varun Sadh, who was recently arrested by the Task Force police, is not a new one. All that he did was exploit the lacunae in the banking system.
While the 31-year-old Sadh, who owns a sari shop in Ramgopalpet of Secunderabad was arrested along with three others, questions remain unanswered as to how the crime escaped the watchful eyes of bankers.
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As usage of credit or debit cards for shopping went up, more and more businessmen are securing such machines as that would boost their sales. By presenting fake documents, he led the banks to believe that he owned shops at different places in the capital, though he actually had only one and acquired card swiping machines.
When a person approaches Sadh with a stolen credit card, the latter swipes it in the machine for a certain amount, which would be debited from the account of the genuine card holder. The money would be eventually paid to the shop owner when he presents the details of transactions to the bank concerned in the hard copy format.
“Both the accused and the person who brought the card know that in actuality no transaction took place between them. As the money would finally reach him, Sadh would pay part of the sum swiped to the person,” investigators said. In fact, Sadh and the person who brought the card were distributing the money debited from the original account holder.
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In this fashion, Sadh allegedly pocketed nearly Rs.6 crore. The second part of his alleged deceit was to clone credit cards of customers coming to his shop using a skimmer which he brought from Thailand two years ago. He would swipe the same for false transactions and make money.
An apparent flaw in the banking system is how the accused managed to get swiping machines by presenting fabricated documents and false claims. If this was an oversight, how did they pay him money for the false transactions? Did Sadh present papers slips of the purchases made from his shop? If so, have the banks failed to verify signatures of the original account holders on the slips?
Cloning of credit cards has exposed vulnerability of card users. How did Sadh bring in the skimmer from Thailand to Hyderabad hoodwinking customs and police authorities at the airport? Can this not be repeated by other offenders?
Answers to these questions are a must to check rerun of such offences.