Damage caused by Abdul Karim Telgi: Fake stamp paper scammer bled state exchequer of Rs 30,000 crore
Only a few scams created such strong ripples in India as stamp paper racket did after its kingpin Abdul Karim Telgi was sentenced to 30 years imprisonment
Only a few scams created such strong ripples in India as the stamp paper racket did after its kingpin Abdul Karim Telgi was sentenced to 30 years rigorous imprisonment by a court in January 2006. Telgi was convicted under the stringent Maharashtra Control of Organised Crime (MCOCA) Act and Section 120A of the Indian Penal Code(criminal conspiracy), apart from the 39 other cases registered against him.
As the sensational scam unfolded, various estimates were made about the magnitude of the scam, which rocked the financial markets. The intelligence agencies had then pegged its size at a mind boggling figure of up to Rs 20,000 crore. However, some other estimates ranged from Rs 3,000 crore to Rs 30,000 crore.
The investigation agencies discovered that he ran the business like a mega industry and had even recruited about 350 agents to sell the duplicate stamp papers of various denominations in bulk to banks, insurance companies, and stock brokerage firms.
To give a sense of the scale of the scam, Telgi had started his life as a vegetable vendor in trains but by 2001, his vast empire included 36 properties and over 120 bank accounts in Delhi, Mumbai, Bengaluru, Chennai and other cities. After his conviction, he was also asked to pay Rs 202 crore as fine, according to NDTV.
He ran his business allegedly in connivance with top police officers and people in power, according to investigations. Telgi bribed government officials to procure machinery from the Indian Security Press (ISP) in Nashik, which was declared as 'junk'.
Once piles of freshly minted fake stamp papers were ready, Telgi would use his clout with government officials to project a shortage of authentic documents. Then his army of agents would pump out the couuntrefiet documents in the market.
Telgi, who died on Thursday due to multiple organ failure while serving his sentence, ran the empire as the mastermind of the counterfeit stamp papers until 2003, when the scam first broke out and shook the nation. The 56-year-old was serving his term in Parappana Agrahara Central Jail in Bengaluru
How the scam caused damaged to the state exchequer
It is estimated that fake stamp papers worth crores of rupees were sold across seven states between 1995 and 2003 as part of the scam. 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, according to The Financial Express.
However, another report in the Free Press Journal stated that the scam as it was spread across 72 towns and 18 states.
R Sri Kumar, Karnataka Additional Director General of Police, in 2003 interview to Rediff had said that Telgi's operations were known in Andhra Pradesh, Delhi, Goa, Gujarat, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Punjab, Rajasthan, Tamil Nadu, Uttar Pradesh, West Bengal. Karnataka police suspected his links in other states like Bihar, Himachal Pradesh, Jharkhand and Orissa also.
Moreover, according to a Frontline report, lakhs of people who unknowingly bought his stamp paper would have been left with invalid documents had the Reserve Bank of India not stepped in and declared that they would still hold good legally.
CBI lawyer Raja Thakare arguing for the maximum punishment possible for Telgi in 2007, according to Hindustan Times, had said that the scam caused heavy damage to the state exchequer and ruined the lives of several people by involving them in the scam.
With inputs from agencies
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Sankar, a career Central banker, has worked in various positions at the Reserve Bank of India. He has a Master of Philosophy in Economics from the Jawaharlal Nehru University