A widely held belief of pure and cheap gold coming from the Gulf among gold merchants and the general public in India was exploited by a gang of enterprising cheats in the south of the country.
Police in Nellore district of Andhra Pradesh busted a gang active in Andhra Pradesh and Tamil Nadu, arresting ten of its members including the kingpin Devarakonda Sudheer, alias Ajay Reddy, earlier this week on charges of cheating gold jewellers out of Rs30 million (N85m)
Nellore district superintendent of police B V Ramanakumar said that the gang had come up with a bizarre modus operandi to trap the unsuspecting gold merchants from different places in the coastal Andhra region.
“They lured the merchants promising to sell them gold at cheaper rates compared to the local market price. They said they could do it as the gold was smuggled from the Gulf and other foreign countries,” he said.
Acting out an elaborate drama, the gang defrauded buyers in a number of ways, including assuring merchants that they had the backing of powerful people including customs officials.
“To impress a gullible buyer, some people would arrive in a luxury car posing as customs officials and traders from Dubai when the transaction would be under process,” Ramanakumar said.
According to police, the scam began with Ajay Reddy first selling a gold biscuit at a far cheaper rate to a local merchant in Kavali town of Nellore district. The gold biscuit was sold for Rs250,000 (N712,806), almost 50 per cent less than the market price. As word spread among the gold merchants, the gang attracted more buyers. They also operated in Chennai in neighbouring Tamil Nadu.
In Chennai, the gang collected money from traders by handing them tiffin boxes saying they contained gold biscuits, and were able to extort millions of rupees from the unsuspecting traders without selling any gold.