Telgi Scam 2003: From street vendor to mastermind of multi-crore stamp paper scam.

The Telgi Scam, one of India’s most notorious financial frauds, involved the counterfeiting of stamp paper worth approximately Rs.32,000 crore. Mastermind by Abdul Karim Telgi, the scam exposed deep-rooted corruption and insufficient within the Indian bureaucracy and law enforcement agencies.

Abdul Karim Telgi 

Telgi was born on July 29, 1961, in Khanapur, a small panchayat town in Karnataka that shares a border with Maharashtra. When Telgi was younger, his father, an employee of the Indian railways, passed away. During this time, he provided for his family while still paying for his schooling.

Telgi was forced to work odd jobs, such as selling food on trains. He started his work as a simple fruit and vegetable vendor in Mumbai. Telgi may appear to be just another name but dive a little deeper into India’s financial scams, and his story emerges as fascinating and cautionary.

Telgi’s exceptional attention to detail and thorough mastery of the bureaucratic system set him apart and helped him spot an interesting opportunity in the stamp paper industry. Later, he became the mastermind behind the infamous stamp paper fraud of 2003, and till now, it is one of the most engaging stories.

Inside the Scam

The legal proceedings against Telgi and his associates were conducted in various courts across India. The charges against him included counterfeiting of stamp papers, racketeering, and corruption. The trials were made by numerous witnesses, including those who had been part of his criminal network including government officials.

The scale of the scam necessitated an extensive investigation. Telgi’s operations spanned multiple states, involved a vast network of accomplices and had severe implications for financial institutions and legal transactions. During the trial, shocking revelations emerged about the extent of corruption within the system. Government officials, Police Personnel, and Judicial officers were found to be involved in facilitating Telgi’s operations.

This scam stands out due to its scale, involving an estimated Rs.30,000 crore and sprawling across multiple Indian states. The scam was a deep exploration of bureaucratic corruption and systematic failures within the country. In one of the most significant judgements, Telgi was sentenced to 30 years of rigorous imprisonment and fined Rs.202 crore.

Investigation of Telgi Scam

Investigations reveal that Telgi’s team bought access to machinery and printing supplies to produce the false papers, as well as bribed employees of the Indian security Press in Maharashtra to help create an artificial shortage of documents.

Telgi’s scam, which started in 1992, included two elements-

1. One was to create documents with fake stamps.
2. To create a shortage of stamp paper so that Telgi would have to good opportunity to supply the fake.

Telgi acquired the old machinery that Nashik Security Press had shut down and was being sold off at auction to create the stamp papers. Along with the regular people, banks, brokerage firms, and insurance corporations were among his customers. Without the help of Police Officials, the racket would not have survived. Even when it was falling apart, they continued to offer support. As part of the investigation, a few police officers were also detained.

Highlight of Telgi Scam

Unit	Specification
August 19, 2000.	Two guys were arrested in Cttonpet, Bengaluru while smuggling fake stamp sheets. The man revealed the scheme during the interrogation, which spared raids through Bengaluru that found more than Rs.9 crore worth of fake stamp paper and other legal documents. Abdul Karim Tyagi, however, was only one of the suspects who had fled at this point.
Between 1996-2003	Telgi recorded a small amount of revenue on his tax filings for each year between 1996 and 2003. In the assessment year 1996-1997 alone, the Tax Department valued his income to be Rs.4.54 crore, of which Rs.2.29 crore was “unaccounted”.
November, 2001	Telgi was eventually apprehended when the police received a tip that he was making his way to Ajmer, Rajsthan, for a religious pilgrimage.
In 2006	Telgi was given a 30-year prison term with hard labour in 2006. A further 13 years were added to his sentence in 2007. Additionally, he was ordered to pay a Rs. 202 crore fine.
In 2004	When the CBI filed a charge sheet against the Telgi scam in 2004, Telgi was transferred to prison and the SIT was unable to properly question him.
In 2010	But a tax tribunal in Bengaluru found that he had collected a “huge unaccounted sum from the racket of counterfeit stamp papers” in 2010.
In 2017	The High Court found two prison guards guilty of supplying Telgi with cell phones. Meningitis took his life suddenly in 2017, which was made worse by ongoing medical conditions like diabetes and hypertension. After experiencing various organ failures, Telgi passed away at Victoria Hospital in Bengaluru.
December 31, 2018	One Year after his death, a Maharashtra session court freed Telgi and seven other people in the Stamp Paper Scam case.
Onward 2018	P.R. Deshmukh, the court’s first-class judge, ruled that there was insufficient evidence to convict the accused person.

Political Involvement

According to reports politicians were also involved in this scam. In the Narco test, Telgi explores several revelations, including naming many high-profile politicians.

Ministry at the time of scam-

1. Sharad Pawar, Ministry of Agriculture, GoI.
2. Chhagan Bhujbal, PWD Minister, Maharashtra Govt.
3. Roshan Baig, Ministry of Transport, Karnataka Govt.
4. Mohammad Ali Inamdar, Ministry of Housing, Maharashtra Govt.
5. Suresh Kalmadi, Ministry of Sport, Maharashtra Govt.
6. Vijay Kumar Gavit, Ministry of Revenue, Maharashtra Govt.

According to Telgi, he had allegedly bribed these ministers. However, everyone denied the claims.

Impact of the Telgi scam

Unit	Specification
Impact on Economy.	The scam resulted in a substantial loss of over Rs.30,000 Cr. This money could have been used for public welfare and development.
Impact on Stam Documents.	Stamp papers are crucial documents like property deals and contracts, the incident undermined people’s faith in the legitimacy of these transactions.
Impact on Banking Sector.	Various Banks relied on stamp papers to validate documents for loans and other financial transactions. With counterfeit papers in circulation, the legal validity of these documents became uncertain, creating complications.
Regulatory Changes.	In response to the scam, the government updated the stamp paper production and distribution process. This led to the introduction of e-stamping in 2005, aiming to bring transparency and accountability to the system.
Impact on Foreign Investment.	It raised concern about the country’s regularity environment and the ability of institutions to overseas financial activities, potentially discouraging foreign direct investment.
Administrative Reforms.	The scam highlighted the involvement or negligence of certain government officials, prompting increased scrutiny and restructuring within administrative ranks to prevent future fraud or any such scams.

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