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Since 1st March, 1999
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- India's reputation takes a knock as first big fraud hits BPO industry

Mumbai, April 14: Meet Ivin Thomas, 30, and an MBA, now in custody. And the leader of Pune's BPO Sixteen, India's answer to Ocean's Eleven.

Only, Thomas is real, which is bad news for India's booming BPO business.

Outsourcing has been given a whole new meaning by Thomas and his compatriots who have worked at one point or another in MsourcE, the BPO outfit of Jerry Rao-led MphasiS BFL.

With arrests over the past week or so, India's first major financial crime in the BPO business has come to light, giving the country a bad name and triggering dire predictions of a huge setback to prospects.

Ivin and his colleagues siphoned $425,000 (Rs 1.83 crore) off the accounts of Citibank's New York customers and deposited the money in different bank accounts in Pune between February and March 2005.

Pune police, who have arrested 16 former and current employees of MsourcE, said the group used the stolen money to holiday in Goa and a foreign country.

MsourcE largely handles customer relationship management at its 2,500-strong Pune centre for some 35 clients, including Citibank.

An MphasiS spokesperson said: 'MphasiS has taken this incident with all the seriousness it deserves. We have instituted our own internal inquiry and taken necessary short-term and long-term measures in consultation with Nasscom.'

Nasscom is the information technology industry association.

The fraud was detected in early April when Citibank's New York office received a complaint from an account-holder who was denied a money withdrawal. Three other account-holders made a similar complaint. The obvious inference is that the Group of 16 had taken so much money out of their accounts that there was little left.

The police have so far traced two transactions, one worth $350,000 and another of $75,000.

'Alarmed, they (Citibank) traced the transactions to Pune, and alerted their Indian counterparts. The Citibank officers filed a complaint with us, and we decided to lay a trap on April 4,' said Sanjay Jadhav, Pune's assistant commissioner of police who heads the cyber crime cell.

The police contacted the banks where the money was being transferred and alerted them. The accounts were frozen immediately on police orders and the banks asked to inform the authorities if any account-holder turned up.

'Rupee (Cooperative) Bank people were very alert and effective and phoned us a day later when Ivin Thomas walked into the bank. We were lucky that we got the prime suspect straightaway,' said Jadhav.

Thomas, who belongs to a middle-class family, led the police to his other friends, 20-year-old Siddarth Mehta, and 24-year-old Stephen Daniel. All three were once employed with MsourcE.

The police said they worked as customer relationship managers and had performed the miracle of acquiring the Net banking pins, or online banking passwords, of Citibank customers. They used these passwords to take money out, operating from Internet cafes, the police added.

Investigations led the police to nine others who had opened bank accounts to deposit the money. The police have recovered cash worth Rs 10 lakh, two cars, a computer, and three cameras, including a handycam.

Jadhav said the police had identified Thomas, Mehta, Daniel and 25-year-old Marylene Fernandes as the key people in the crime. The others helped them to transfer the money into various accounts. 'All four come from respectable families,' Jadhav added.

The majority in the Group of 16 are in their twenties.

The police discovered that Daniel had worked with the Defence Research and Development Organisation before joining MsourcE. The link has attracted the eyes of the Intelligence Bureau.

On April 6, Pune police commissioner D.N. Jadhav announced the arrest of 12 people, sending the BPO industry into a tizzy. A day later, John McCarthy of Forrester Research, which does research for technology companies, warned that the fraud could severely damage the credibility of Indian BPO companies and slow their growth by 30 per cent.

So far there has been no business impact on MsourcE. According to sources in Pune, Citibank officials were in town and the relationship between the two continues. But the incident would have caused some embarrassment to Jerry Rao, who had once headed Citibank in India.

Nasscom president Kiran Karnik lauded the speedy action taken by Pune police and said the organisation would assist them in strengthening the e-security framework.

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