UNIVERSITY OF PETROLEUM AND ENERGY

STUDIES

B.A.LLB (CORPORATE LAW)

TELGI SCAM

SUBMITTED BY:
ANANTA UJJAIN
(R450220003)
Introduction

India has a history of scams, After the biggest scam in 1992 by Harshad Mehta, a bigger scam
emerged in 2003. This scam is called a stamp paper scam. Stamped paper is widely used
around the world to collect taxes on documents that require stamps, such as leases,
agreements, receipts, court documents, and many others. The scam involved the printing and
production of counterfeit stamps and stamp paper. The mastermind behind this scam is Abdul
Karim Telgi, who initially started out as a salesman, then worked in travel agencies and came
up with the idea of making fake stamps. Abdul Karim Telgi rose to prominence as one of
India's most prominent con artists and his name was ingrained in the collective consciousness
of the country following the 2003 counterfeit stamp paper scandal. A scheme that involved 12
states and over Rs 20,000 crores revealed the widespread corruption in the nation's
bureaucracy and politics. It entailed the massive fabrication of flawlessly forged stamp
sheets, which were offered at steep prices to major institutions and organisations.

Background of Abdul Karim Telgi

 Abdul Karim Telgi is a fruit and vegetable seller at Mumbai railway station. He was
born and raised in a middle-class family. His father was a grade IV railway officer.
The family faced many financial crises but still tried to make a living. They have
money to meet their basic needs by selling fruits and vegetables at Khanapur railway
station. The station used to be a destination for 12 trains in the 1970s. Telgi completed
his studies at Sarvodaya Vidyalaya and went to Gogte College of Commerce for his
B.Com degree. Mumbai was the first place he looked for a job after completing his
studies. He was appointed as Sales Director at Fillix India. Due to his continued poor
performance, he had to quit his job. He then went to South Mumbai and was
appointed as the manager of Kishan Guest House. He was still unhappy with his job
and due to laziness, he had to quit his job again. He intended to make money faster so
he thought of going to the Middle East and started making money there.
 In the 1980s, he went to Saudi Arabia and stayed there for 7 years. After 7 years, he
realized that he could not stay any longer and returned to Mumbai.

Vision of Abdul Karim Telgi

His vision of earning more money in less time allows him to do the job easily using shortened
methods. This leads him to the underworld. He managed to establish contacts with the
underworld, politicians, and officials. Seven years in Saudi Arabia turned his interest to travel
scams. He saw travel agents sending people to Saudi Arabia to work illegally. He then
founded a travel company called Arabian Metro Travel Company. His frequent fraudulent
activities include making fake passports and defrauding customers. To get people to Saudi
Arabia, he also tried forgery, but his credentials were questionable and there was a high
chance of being caught.

He had a group that created a whole bunch of fake documents, passports, etc. He had built
such strong relationships over 7 years that he could smuggle people abroad illegally and
make money easily. Many times, its market demand increases and people who dream of
going abroad are willing to pay any amount to do so.

But gradually, the process of sending people abroad became more rigorous. This process is no
longer smooth and easy. People find themselves stuck because they have not received their
permits and are therefore unable to travel abroad. In 1991, many people sued him for his
activities.

In 1993, he was arrested for VISA fraud and sent to prison. In jail, he became involved with
another fraudster who was Ratan Soni, arrested for fraud on the Indian Stock Exchange. From
this meeting arose the idea of one of the biggest scams in India.

The Stamp Paper Scam

 Telgi learnt how to conduct crimes and gain a lot of money when he met Ratan Soni
in jail. He was persuaded to do major crimes by Ratan Soni as opposed to small-time
crimes for a few thousand dollars. They came up with concepts for several successful
businesses.
 Telgi learned that the Stamp Paper office was the government agency with the least
oversight at the time. They had the notion to create what amounted to virtual money
and to make phony stamps. The money made from these frauds was measured in
billions of rupees at the time. Both have ties to politics, the underworld, and
politicians. They understand it is sufficient to pull off the largest swindle in India.
 They were all aware in the 1980s that commentators needed a formal document. At
the time, they sold it for less than Rs. 100. They were aware that they could get what
 they wanted from politicians and other government representatives. All that was
needed was to maintain their satisfaction and admiration. Telgi made contact with
MLA Anil Gote of the Samajwadi Janata Party. Telgi requested that he set up the
meeting with the Congress government of Maharashtra's Revenue Minister at the
time. In 1994, Telgi was successful in obtaining a permit and starting a stamp paper
business in Mumbai. He created many bank accounts and offices in Mumbai so that
he could access more resources and be safe.

 He used this machinery for fraudulent purposes. He made full use of his connections
and even purchased all their raw materials from the Indian Security Press. To make
the fake stamps look real, he purchased the same ink and everything from Nasik
Press. By using this technique, he started printing the exact replica of the stamps that
were printed by the government of India.
 He created a wide network and offered commissions of 20% to 30% to the vendors.
The government used to give only 3% of the commission. This attracted the vendors
and the distribution of stamps was made easy. Even Vendors were surprised and
weren’t able to differentiate between the original and fake stamp papers. More than
350 vendors sold his duplicate stamp papers to banks, insurance companies and
corporates.
 The connections he made helped him create a scarcity of original stamp paper. This
made him sell his own duplicate stamp papers in the market. He blocked the supply of
original stamp paper by diverting it to a superficial address and injecting his duplicate
stamp papers into the market in place of the original. It was then that the market was
full of fake stamp papers. He got fake stamps for almost every purpose from revenue
stamps to share transfer certificate stamps. He had more than 170 offices and over
900 employees to do his fraud work. He had 120 bank accounts made to commit
fraud.

The Arrest of Telgi

Someone alerted the authorities to the influx of phoney stamp sheets in 2000. Two Telgi
couriers were apprehended while being transported across the state of Karnataka. Police had
his phone bugged and were monitoring him. While traveling to Ajmer, Telgi was detained.
The mastermind behind the Stamp paper hoax was apprehended and imprisoned.
A court case involving Telgi was handled at the Bund Garden Police Station in June 2003.
All the duplicate and fraudulent stamp sheets were found, and a Special Investigation
Committee led by top departmental personnel was formed. It was discovered throughout the
inquiry that India Security Press was complicit in the fraud. They discovered that the
department's government representatives assisted in the transfer of printing technology to
Telgi. The Special Department did not take any action against the press at that time. Since
1994, the fraud has been committed, and it included a significant amount of money. Further
investigation led to the discovery of the fact that the politicians, government officials, and
influential leaders who were a part of the Nasik Press were also involved in the scam. Anil
Gote, the MLA from Dhule was put behind the bars for 4 years. However, the charges against
Anil Gote were revoked because there were several other big names as well who were
involved in the scam. The Special department conducted NARCO Test on Telgi and got to
know these big names.

To escape the liabilities, Telgi spread the controversy that he was nervous and conscious
during the test, which led to the deletion of these two names from the investigation. The case
was then transferred to the CBI department. CBI found some more big names who were the
MLAs, Minister of Andhra Pradesh, Mumbai Police Commissioner, Former Joint
Commissioner of Mumbai Police(Crime Branch), former Deputy Commissioner of Mumbai
police, and suspended IPS officer. Many cases were filed against these officers by CBI. In
2006, Telgi pleaded guilty and was convicted. He was given 30 years of imprisonment and a
huge fine of Rs. 202 Crores. Later the imprisonment was cut down to 13 years.

The Demise

Telgi had a number of medical conditions. In 2002, he was confirmed to be HIV positive. He
stated in 2005 that he was refused treatment for his illnesses, including HIV and diabetes, and
that others who were afraid of his authority had injected him with the virus. He had been
dealing with high blood pressure and diabetes for around 20 years. Meningitis claimed his
life on October 23, 2017, at Victoria Hospital in Banglore. He passed away before serving his
time in jail. That made him only 56 years old. Following his passing, everyone was freed and
all accusations and charges were dropped.

Many became interested in learning about the hoax after his passing. In order to shed light on
and provide an explanation for the Stamp incident, the filmmakers chose to create the 2009
Hindi-language thriller "Mudrank: The Stamp," which was directed by Shakir Shah. "Paper,"
a web series featuring Rohit Roy as Telgi, debuted in 2020. One of the eight frauds covered in
a documentary series was Telgi's "Fake Stamp Papers" scam. As a follow-up to Scam 1992,
Hansal Mehta has also made the decision to introduce "Scam 2003."

Concluding Remarks

 Much has been written about Telgi's journey from poverty to wealth. But his
obsession with knockoffs also showed up in his private life. Telgi was a frequent
patron of the Grant Road pub Topaz in Mumbai. It was common knowledge that the
pub used dancers who were exact replicas or imitations of Bollywood stars.
According to reports, that's where Telgi first met Madhuri, who went under Madhuri
Dixit's pseudonym. He never done more with her than admire her appearance.
However, it is said that on December 31, 2000, New Year's Eve, he lavished the
dancer with Rs 90 lakh. The dancer allegedly informed a journalist that Karim Sahab

had an infatuation with Bollywood in the book Dangerous Minds. When he failed to
gain access to the real Bollywood stars, he settled for the clones who were on display
at various bars. Over time, it seemed that Telgi had a fetish for the fakes – from
actresses to stamp papers.” Three years ago, in July 2005, Telgi said he was injected
with the AIDS virus by prominent persons who feared exposure for their involvement
in the multi-crore false stamp paper case. He also said that he was not given
medication for the several illnesses he had, including HIV and diabetes.
 There were several complaints and charges brought against Telgi even after he was
found guilty and imprisoned. The swindle had a serious negative impact on the
government, which moved to strengthen the legislation. The fraud had a large number
of well-known and influential participants, demonstrating the deep corruption and
damage that our system has from the inside out. To make sure that a major fraud like
this one doesn't occur again in the future, the authorities implemented safeguards and
tightened security checks. The government's actions were also influenced by the fact
that the Stamp Department was not adequately controlled at the time. This taught the
government a valuable lesson on how to effectively oversee and monitor all
departments. After the fraud was discovered by the government, there were more
counterfeit stamps on the market, making it challenging for even the sellers to spot
them and throw them away.