Telgi and the fake stamp paper scam
In 2003 an editorial in the Financial Express wrote:
The tentacles of the fake stamp and stamp paper scam, better known as the Telgi scam, has penetrated 12 states and is estimated at a whopping Rs 20,000 crore plus. Between 1992 and 2002, 12 cases were registered against Telgi relating to counterfeit stamps in Maharashtra alone and 15 cases in other parts of the country, but the lack of serious action suggests that the scamster had mastered the technique of corrupting the system. The Telgi scam is by no means a case of police corruption and political connivance helping an ingenious crook to set up a fast-growing dubious business. Telgi clearly had a lot of support from other departments and institutions of government that are responsible for the production and sale of high security stamps. But questions about their involvement are just beginning to be asked. Even more shocking is the fact that the Special Investigation Team’s enquiry report, better known as the Jaiswal report, had already asked these questions in November 2002, but no action has been initiated on the wider issues raised in the report.
Meanwhile, many questions remain unasked and counterfeit stamps probably continue to be sold across the country, because the distribution network is untouched. The Jaiswal report has indicated clearcut connivance of officials of the India Security Press at Nasik in the transfer of appropriate technology, including transfer of stamp designs and from original negatives; that the Security Press was completely infiltrated by unscrupulous elements. Yet, no heads have rolled at the Press, nor has any urgent action been initiated to overhaul its systems and procedures. Similarly, the failure of treasury department officials to notice the large-scale use of counterfeit stamps in Maharashtra has also to be investigated. What has been revealed so far is just the tip of the iceberg.
The scam was so big that large myths accreted around this criminal. Anil Dharker propagated one in his piece in the Hindu in 2003:
The father died when Abdul Karim, the second of three sons, was still a child. He was determined to study and supported his own education at a local English medium missionary school by selling vegetables and fruit on trains.
This registers a distinct hit on my bullshit meter. Telgi was born in 1956. If he put himself through school selling bananas, he would have done it in the early ’60s. Comparing the profits from selling bananas to the monthly charges in an English medium school in the ’60s will tell you how improbable this story is.
The scam fell below the media radar soon after this article was written, emerging from comfortable obscurity when the first convictions came in 2006. At that time Frontline rand a long article which is still worth reading:
ABDUL KARIM TELGI, mastermind of perhaps the biggest ever scam the country witnessed in recent history, has finally been convicted. The judgment was really no surprise. Obviously, a man who defrauded the exchequer of thousands of crores of rupees by selling fake stamp paper could not possibly be allowed to walk free. However, the severity of the punishment seems hardly the issue in the Telgi case.
Investigations, which began two years ago, could have revealed the role of several prominent politicians and possibly some bureaucrats in the scam. More important, some observers say, this was a perfect opportunity for lawmakers to replace an archaic procedure with a foolproof system using modern technology. But neither has that happened.
On January 17, 2006, almost 11 years after the first case against Telgi was registered, special Central Bureau of Investigation (CBI) Judge U.S. Salvi pronounced the scamster guilty on seven counts: criminal conspiracy, counterfeiting government stamps and cheating, among others. He sentenced Telgi to 10 years of rigorous imprisonment (RI) and imposed a fine of Rs.1.4 lakhs. Two associates of Telgi, Sanjay Gaikwad and Ramratan Soni, were also convicted to 10 years’ RI. It was the latter who introduced Telgi to the art of counterfeiting when they shared a prison cell in 1991. At that time, Telgi was serving time in a cheating case.
Telgi’s modus operandi involved washing cancelled stamp papers with chemicals, which would make them look as good as new. He would sell them through his network of front men. Additionally, he cultivated officials at the Security Press in Nashik, where stamp papers are printed. With their connivance he used government machinery to print stamp paper. He eventually bought some of the machinery and started counterfeiting on his own.
His “executives” would approach big corporations such as Indian Oil or the Life Insurance Corporation and offer them discounts of up to 5 per cent – a substantial amount given that most stamp vendors give discounts up to 2.5 per cent.
Apparently, Telgi established contact with politicians through their henchmen. He never entered into too many deals. Once he reached an agreement for the circulation of stamps, he would offer them a Statewide and, in some cases, countrywide contract on the deal. Clearly, he was clever enough to protect himself as he regularly recorded all his conversations. According to Public Prosecutor Thakare, he recorded them with the introduction by the person he spoke to so he had enough evidence to blackmail. There are almost 100 hours of taped conversations in the hands of the SIT. Owing to the court case, this valuable evidence remains locked. “Some top names will come out and many heads could roll once the tapes are transcribed,” Thakare told Frontline.
The law caught up with Telgi in 2001. The Karnataka Police, who were tracing a stamp paper fraud, found that the evidence led to Telgi. They caught him in Bangalore. Even in jail, Telgi is reported to have continued his operations. In 2002, the Pune Police seized a car carrying fake stamp papers in Bund Garden and once again all evidence led to Telgi. The investigations following this seizure unravelled an elaborate network of fraud spanning the entire country.
As politicians and bureaucrats soft-pedalled the issue, investigators were never given complete freedom to probe the scam. Finally, in November 2003, with public pressure mounting along with social and anti-corruption activist Anna Hazare filing a public interest petition in the Bombay High Court, the court appointed the SIT to investigate the scam. The next few months saw a once-tough Mumbai Police force crumble. Upwards of 50 police officials were arrested. Among them was Inspector-General of Police Sridhar Vagal, who was the first to be caught, for accepting Rs.72 lakhs from Telgi. In addition, Vagal had reportedly amassed property worth Rs.50 crores, which was completely disproportionate to his known sources of income.
Much more there; many names. The incidents are now far enough in the past that you can follow up the whole sordid history using your favourite search engine and see exactly how few of the accused have ever been brought to justice.
In 2006 Rajinder Puri on Boloji named more names and connected it to an older and even more insidious scam:
Currently CNN-IBN is telecasting taped conversations between Abdul Karim Telgi and compatriots. Mr. Telgi is the public face of the hidden mafia behind the nationwide fake stamp papers scam. It is India’s biggest ever scam. CNN-IBN said Mr. Telgi made Rs 30,000 crore. He did not. He generated Rs 30,000 crore. This scam makes a mockery of national security. It exposes a dangerously compromised political class and a soft state incapable of containing terrorism. To get the whole picture, let us begin at the beginning.
As early as 1995 Mr. Telgi was arrested for selling fake stamp paper which was found, on examination, to be as good as genuine by the Indian Security Press. That was a trial run which suggested official complicity at a low level. Two years later in 1997 the real fake stamp paper scam began.
In a public auction the government security press in Nashik sold to Mr. Telgi a dozen presses without dismantling them and without removing the dyes. This was illegal. It enabled printing of authentic stamp paper. The official responsible for the auction was promoted. Mr. Ram Jethmalani, as cabinet minister, recommended his promotion. Mr. Yashwant Sinha, as finance minister, ordered it. Later the police arrested the official. But the government did not dismiss him. The Committee of Secretaries and senior officials of the finance ministry defended him.
Now Telgi has been convicted and sentences are being pronounced in the cases in Bangalore. Here is the quantum of justice, as reported by Deccan Herald:
A special court awarded seven years imprisonment to multi-crore stamp paper scam kingpin Abdul Karim Telgi on Saturday.
The court has also ordered him to pay a fine of Rs one lakh failing which to serve four more years in jail.
With the sentence, the Special Court completes the hearing of all the nine cases registered in Karnataka related to the scam.
Telgi and 16 of his associates – Badruddin, Rafi Ahmed, Sadashiva, Abdul Wahid, Abdul Khuddus, Sachin Kalage, Sarfaraz Nawaz, Illiyas Ahmed, Sadiq Ibrahim Hudli, Nizamuddin, Siddu, Mohammed Asif, Mansoor, Suleman, Deepak and Jacob Chacko were convicted on September 14 under section 259 of the IPC for possessing material necessary for counterfeiting stamp papers.
“As you have not been taken into custody for investigation in this case, you will have to undergo imprisonment for the complete term (seven years),” the Judge told Telgi on Saturday. They all were produced before the court using video conferencing facility.
In his 1056-page judgement, the Judge has ordered that each of the Telgi’s 16 accomplices will have to undergo imprisonment of five years and a fine of Rs 20,000.
However, Telgi’s counsel M T Nanaiah said that an appeal will be filed against the sentence order for considering the period Telgi has spent in Bangalore and Pune’s Yerwada prison since 2002. Telgi is going to complete 10 years of stay in the prison by November this year.
* March 24, 2007: Telgi, Badruddin, Irfan Ahmed, Wazir Ahmed Salik and Pradeep Kumar were sentenced for 10 years RI and fine of Rs 42.75 lakh for cheating government and Peenya-based Sami Labs.
* April 23, 2007: Telgi, Badruddin, Anees Khan, Mohammed Illiyas, Wazir Ahmed Salik awarded 10 years of RI and fine of Rs 4.94 lakh for cheating the Government and a private company.
* June 21, 2007: Telgi and two doctors from Victoria Hospital sentenced to seven years RI. Telgi had bribed the two doctors to avaial false medical certificates to get bail.
* December 15, 2007: Telgi, Badruddin, Wazir Ahmed Salik, Pradeep Kumar awarded five years RI.
* March 29, 2008: Telgi, police inspector Wali Pasha and Sub Inspector V A Khan acquitted in a case accusing police officers of subverting a case related to stamp paper scam.
* April 17, 2009: Telgi and seven others were sentenced to undergo seven years RI for preparing and selling fake stamp papers in Bangalore’s City Market police station limits.
* February 17, 2010: Telgi to undergo 10 years RI and 18 others to undergo seven years RI.
* September 14, 2010: Telgi and 16 others convicted for possessing counterfeit stamp papers and the materials used for preparing them. They were acquitted of charges under the Karnataka Control of Organised Crime Act, Karnataka Stamp Act and Prevention of Corruption Act.
So according to this report Mr. Telgi has been fined INR 48.69 lakhs. This is 0.002% of the value of the scam quoted in the Financial Times article. That is a 2 rupees fine for every lakh stolen!
HT asks the question that everyone will be asking: “Where are Telgi’s missing millions?” The article says:
n 2003, when the scam was busted by the Special Investigation Team (SIT), it was said to spread across several states in the country, including New Delhi, Karnataka and Andhra Pradesh and could be worth more than Rs 6,000 crore.
This was based on the recovered consignment of fake stamp papers worth hundreds of crores and the assumption of more consignments already in the market.
According to Thakare, the CBI affidavit was based on the findings made by a special committee appointed specifically for ascertaining the amount involved.
The figure came down to Rs 3,000 crore. The affidavit filed by the Central Bureau of Investigation (CBI) brought down the amount to Rs 178 crore.
CBI special prosecutor Raja Thakare stated that Telgi did not have even a lakh of rupees in the several accounts he and his wife’s bank accounts. “They (money) were in thousands,” Thakare said.
Another case in which the money will never be traced.