2 card payment firm staffers arrested in ₹3cr refund scam

Mumbai:

Two employees of a card payment processor have been arrested for allegedly siphoning off Rs 3 crore from the company’s accounts by initiating fraudulent refunds of transactions that never took place.


On Tuesday, cyber police arrested Mahesh Dyavanpelly (31) from his Worli residence after his name cropped up in the scam. This is the second arrest in the case. Last week, they had arrested Zulfikar Ali Nafi, another employee, from Coimbatore in Tamil Nadu.

Dyavanpelly was a risk executive handling card transactions, disputes and recovery. Police told TOI the arrest of the two employees could be just the tip of the iceberg and that more individuals might be involved in the scam.

The company, Mswipe Technologies, offers point of sale terminals which enable merchants to collect credit and debit card payments.

Police said the fraud took place between April 2017 and March 2018 and was unearthed only recently during an audit. Auditors learnt that 33 debit cards were swiped for 406 transactions with the help of 16 merchants and a total of Rs 3 crore was transferred to a few accounts which were found to be suspicious.

The company has two accounts with Corporation Bank and Ratnakar Bank, respectively. A third party, Hitachi Payment Services, based in Chennai, processes fund transfers.

Auditors found that some refunds were generated after customers cancelled their orders and returned the goods.

During the 2017-18 audit, officials stumbled upon fake refunds totalling Rs 3 crore. Further scrutiny revealed that the amount was refunded to 16 merchants, five of whom were shown as based in Delhi and two in Srinagar, Kashmir. The officials tried to contact these merchants but found they did not exist.

“With technical help, we found the trail of money and arrested Zulfikar from Coimbatore. Dyavanpelly’s name cropped up during his interrogation. We found that Rs 10 lakh was transferred into Dyavanpelly's accounts and a few lakhs into his relative’s accounts. His relative is under the scanner too,” said officer.

Police said they have invoked Indian Penal Code sections 408 for criminal breach of trust by a clerk or a servant, and for cheating and forgery, besides IT Act. Police said the accused reportedly operated fictitious accounts.

Ajay Dubey, advocate for Dyavanpelly, said, “My client is innocent as some insider has transferred funds into his brother’s accounts and has framed him in the case. We will fight our case on merit at the appropriate time.”