Prepared by

JHS & Associates LLP

Chartered Accountants

RED FLAG REPORT

JULY TO SEPTEMBER

2020
Foreword

Dear Readers,

This publication aims to create awareness about Fraud Risks & Red flags.

“Fraud” is a real risk impacting Indian organizations to a greater extent. The techniques deployed
by fraudsters are complex and usually masked in a complex web of falsehood, forgery and cheating.
Businesses especially smaller ones that are most vulnerable find it very difficult to unearth frauds
and material control breaches. Therefore, we believe that dissemination of Red Flag Indicators Report
and related information (primary goal of this publication) would assist Corporates in developing robust
defense control mechanisms.

In Q2 of FY 2020-21 we have witnessed a variety of large and small value frauds that are summarized
for your benefit in this publication. ICAI has recently issued Draft Standards on Forensic Accounting
& Investigation and my colleague partner Akif Cheulkar has summarized the same in this publication.
SEBI on 29th September 2020 has decided that listed entities shall be required to disclose the details
of Forensic Audit initiated by them and the details of final report submitted. Further, management of
listed entities would be required to disclose the comments of the management on such Forensic Audit
Report.

It is famously said that forewarned is forearmed keeping this in mind our publication team has
researched on newspaper and electronic media stories from leading portals about fraud and red
flags. Post research a crisp compilation of red flag stories has been made for readers highlighting
the nature of breach, quantum of impact and modus of the operator to the extent available in public
domain.

We welcome your valuable feedback and comments.

Best wishes for safety and success

Huzeifa Unwala
Sr. Partner
JHS & Associates LLP

RED FLAG INDICATORS REPORT Page | 02

 INDEX

Sr. No. PARTICULARS Page No.

1 EXPOSURE DRAFT OF FORENSIC ACCOUNTING AND INVESTIGATION 06

STANDARDS (FAIS) ISSUED BY ICAI
1. Preface and framework 06

2. Basic principles and key concepts 07

3. Guidance 07

2 SEBI BOARD MEETING – Disclosure on Forensic Audit of Listed Entities 08

3 BANKING FRAUDS 08
1. Bank Fraud by manager and three others 08

2. Bank Fraud by reputed builder firm 09

3. Delhi-based realtor involved in ₹ 800 Crore bank fraud 09

4. Group of firms commits bank fraud of ₹ 190 Crore 09

5. Indian-American Pleads Guilty In USD 17-Million Bank Fraud 10

6. ED Attaches Assets Of Tamil Nadu Businessman Worth Over ₹ 20 Crore In

Indian Bank Fraud Case 10

7. CBI Raids In Madhya Pradesh Over ₹ 938 Crore Fraud Case Involving Oil Firm 10
8. Bank fraud: ED slaps biggest ever FEMA notice of ₹ 7,220 Crore on Kolkata firm 11

9. CBI files ₹ 1,400 Crore Bank fraud case against dairy product manufacturing firm 11

10. Promoters of a financial services enterprise involved in ₹ 729 Crore bank fraud 11

11. Two senior Jammu and Kashmir officials suspended in ₹ 250 Crore bank fraud case 12

12. Bank fraud of ₹ 1,203 Crore by a renowned Textile Company 12

4 TAXATION FRAUDS 13
1. Chennai Man arrested for ₹ 107 Crore GST Fraud 13

2. 1,377 Exporters fraudulently claim ₹ 1,875 Crore IGST Refund 13

3. Pan-India Fake Invoice Racket of nearly ₹ 434 crore unearthed by DGGI 13

4. I-T department conducts raids regarding ₹ 1,000 Crore money laundering case 13

5. ₹ 173 Crore GST fraud unearthed from Gujarat 14

6. Madhya Pradesh Cement Firm Director Arrested Over ₹ 17 Crore Tax Fraud 14

7. GST intelligence officers arrest promoters of an Indian company dealing in spirits

in alleged tax evasion case 14

8. A racket of clandestine clearance of cigarettes through a factory run in Kota. 15

9. GST evasion of transporters, “passers” in Punjab. 15

10. ₹ 300 Crore bogus GST billing scam 15

RED FLAG INDICATORS REPORT Page | 03

Sr. No. PARTICULARS Page No.

5 INSURANCE FRAUDS 16
1. Two men staged fake car robberies to claim insurance money 16

2. Indian-origin mother, Daughter gets jail for fraud in U.S.A. 16

3. Spurious phone calls and fraudulent offers 16

4. Fraudulent website in the name of IRDAI 17

6 CORPORATE FRAUDS 17
1. CBI case against Indian limited company for siphoning off funds from Mumbai airport. 17

2. SEBI penalizes 12 individuals for fraudulent trading 17

3. SEBI imposes market ban on 7 entities 18

4. SEBI fines former IT Firm official ₹ 10 Lakh for insider trading 18

5. SEBI bans 102 entities from markets for fraudulent trading in an Engineering
Services Firm 18

6. SEBI orders impounding of over ₹ 1.38 Crore in insider trading case of a Jewellery
Concern. 19

7. A leading financial corporation used 2.6 Lakh fraud accounts in fake branch to
siphon funds 19

7 FINANCIAL FRAUDS 20
1. Two arrested for duping people posing as customs officers 20

2. Quarterly financial results leaked through WhatsApp chats 20

3. Unauthorized investment services provided by an individual 20

4. SEBI bans individual for providing unauthorized investment services 21

8 CYBER FRAUDS 21
1. Alina Point-of-Sale Malware Spotted in On-going Campaign 21

2. Try2Cry Workable Ransomware tries targets Windows OS 21

3. Avaddon Ransomware still using Excel 4.0 Macros 22

4. Orange confirms ransomware attack exposing business customers' data 22

5. New Cyber Security Policy to be implemented in India: PM Modi 23

6. Hackers stole 738 GB of data from Australian Government agency. 23

7. Five cheated in Ahmedabad by threat artists. 23

8. Hackers obtained Covid-19 patient database in protest at treatment of Indian

health workers 24

9. Lloyd banks customers targeted by sophisticated Phishing Scams 24

10. 7 VPN services leaked data of over 20 million users, says report 25

11. Credit Card Skimmer Targets Microsoft ASP.NET Sites 25

12. Phishing Campaign Targeting Users of email.gov.in 26

13. Vulnerabilities detected in Google Android and Google Chrome 26

RED FLAG INDICATORS REPORT Page | 04

Sr. No. PARTICULARS Page No.

9 HEALTHCARE FRAUDS 27
1. Fake Covid-19 Reports issued by lab in Amritsar 27

2. Covid Cure Fraud in Delhi 27

3. Bangladesh Hospital Owner Arrested for Issuing Thousands of Fake COVID-19

Test Results 27

4. Meerut Hospital Sealed, License Revoked for Providing Fake COVID-19

Negative Report 28

5. Charged in US $69M fraud scheme, allegedly misrepresented COVID-19 blood test 28

6. Former hospital executive charged in US $1.4B billing scheme 28

7. Hospitals fined in Maharashtra for excess billing 29

10 GENERAL FRAUDS 29
1. PM-Kisan norms eased for Covid, TN probes ₹ 110 crore fraud, 18 held 29

2. 7 Charged In ₹ 50 Crore Public Distribution System (PDS) Fraud In Madhya Pradesh 29

3. Indian National Arrested In US $21 Million H-1B Visa Fraud Case 30

4. Court Frames Charges Against 12 In Multi-Crore Fraud against Udhampur

Businessman 30

5. Man from Haryana held for job fraud 30

RED FLAG INDICATORS REPORT Page | 05

 1. FORENSIC ACCOUNTING AND INVESTIGATION STANDARD (FAIS)

I. Issued by: The Digital Accounting and Assurance Board (DAAB) of The Institute of Chartered Accountants
of India (ICAI)

II. Date of issue of Draft: 27th August, 2020

III. Last date of sending Comments/ Suggestions: 30th September, 2020

IV. Applicability: FAIS are a minimum set of requirements that apply to all members of the ICAI when
performing assignments in forensic accounting and investigation

V. Brief Content of FAIS:

(a) Preface
(b) Framework

(a) Preface:

The Forensic Accounting and Investigation Standards (referred to as “FAIS” or the “Standards”) at a
broad level seek to provide:

i. The Professionals with the minimum standards for undertaking Forensic Accounting and Investigation
(FAI) assignments;

ii. The Users of FAI services with an indication of the quality of service that can be expected from such
engagements;

iii. The Regulators and Governmental agencies with an appreciation of what can be expected from FAI
services; and

iv. To everyone, guidance on matters of implementation and related practical issues.

(b) Framework:

The four components of the framework are:

i. Basic Principles of Forensic Accounting & Investigation BASIC

PRINCIPLES
KEY
ii. Key Concepts CONCEPTS

STANDARDS
iii. Standards on Forensic Accounting and Investigation GLOSSARY OF TERMS

GUIDANCE
iv. Guidance IMPLEMENTATION | TECHNICAL

These four components are based on the foundation of CODE OF ETHICS

Code of Ethics.

RED FLAG INDICATORS REPORT Page | 06

Forensic Accounting and Investigation Standard (FAIS) Framework

(i) Basic Principles of Forensic Accounting & Investigation:

The Basic Principles of Forensic Accounting and Investigation Services are a set of core principles
fundamental to the profession and activity of carrying out such services:

1. Independence & Neutrality

2. Integrity and Objectivity
3. Due Professional Care
4. Confidentiality & Secrecy
5. Skills and Competence
6. Contextualisation of Situation
7. Primacy of Truth
8. Respecting Rights and Obligations
9. Segregating facts from opinions
10. Quality and Continuous Improvement.

(ii) Key Concepts:

There are certain concepts which form integral part of the forensic accounting and investigation activities
and, therefore, apply to most engagements. The key concepts are in the nature of (indicative list):

1. Understanding the Subject Matter

2. Fraud Risk Management
3. Application of Laws and Regulations
4. Applying concept of Hypothesis

(iii) Standards on Forensic Accounting and Investigation:

The FAIS (the “Standards”) establish uniform performance and evaluation criteria, methods, processes
and practices. The Standards are pronouncements which form the basis for conducting all forensic
accounting and investigation engagements.

(iv) Guidance:
These are a set of guidelines, which include Guidance Notes, Implementation Guides and Technical
Guides. These guidelines are important for implementation of the FAIS’s and provide clarification for
their applicability under circumstances. They also assist the professional is designing the forensic
accounting procedures and investigations activities to be conducted under various situations and
circumstances.
Source: https://www.icai.org/post/icai-ed-forensic-accounting-investigation-standards

RED FLAG INDICATORS REPORT Page | 07

 2. DISCLOSURE OF INFORMATION RELATING TO FORENSIC AUDIT
OF LISTED ENTITIES

On 29th September 2020, SEBI in its Board Meeting decided that in order to address the gaps in availability of
information on forensic audit, listed entities shall make the following disclosures to stock exchanges, without
any application of materiality: -

i. The fact of initiation of forensic audit (by whatever name called) along-with name of entity initiating the
forensic audit and reasons for the same, if available;

ii. Final forensic audit report (other than for forensic audit initiated by regulatory / enforcement agencies), on
receipt by the listed entity, along with comments of the management, if any.

Source: https://www.sebi.gov.in/media/press-releases/sep-2020/sebi-board-meeting_47739.html

3. BANKING FRAUDS

1. Bank Fraud by manager and three others

Sector: Banking
Nature: Misappropriation of funds, cheating and forgery
Modus: Transferred funds from a co-operative bank’s account using forged documents.
Details: A Bank Manager of a commercial bank along with three persons withdrew ₹ 1,75,48,544 from a
fixed deposit of a co-operative bank through a demand draft using fake documents. Later, they opened
a current account in the name of co-operative bank to transfer the amount in two accounts opened in
the names of two Mumbai-based companies.
Source: NDTV
Web Link: https://tinyurl.com/y2bj3pzq

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2. Bank Fraud by reputed builder firm
Sector: Banking
Nature: Misappropriation of funds, cheating and forgery
Modus: Availed credit facility over a construction project which was left incomplete.
Details: The son of a leading builder and his wife availed credit of ₹ 250 Crore for developing a residential
complex. After ₹ 80 Crore were disbursed the project was left in its initial stages. The company's
account showed misappropriation and diversion of funds and misrepresentation of facts.
Source: NDTV
Web Link: https://tinyurl.com/y6zpk8ap

3. Delhi-based realtor involved in ₹ 800 Crore bank fraud

Sector: Banking
Nature: Misappropriation of funds
Modus: Diverted the loan funds through complex network of companies.
Details: The leading realtor had availed loan of ₹ 800 Crore from various banks for the construction of a
five-star hotel. The owner of the firm and his associates siphoned off a huge part of the credit through
a web of companies owned and controlled by them. The amount was transferred on the pretext of
payment of bills, advance for supply and the funds were routed back to entities owned by the realtor.
Source: NDTV
Web Link: https://tinyurl.com/yy3t9hj2

4. Group of firms commits bank fraud of ₹ 190 Crore

Sector: Banking
Nature: Misappropriation of funds, forgery and cheating
Modus: Obtained loans through fake documents and diverted the funds for other purposes.
Details: A group of over four firms cheated a commercial bank by availing a loan facility by submitting
forged documents and later routed the funds through bogus transactions for purposes different than
the ones they were sanctioned for. The firms committed a fraud of ₹ 190.76 Crore.
Source: NDTV
Web Link: https://tinyurl.com/y5rwy6mj

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5. Indian-American Pleads Guilty In USD 17-Million Bank Fraud
Sector: Banking
Nature: Obtaining line of credit by fraudulent means.
Modus: Fabricated or inflated many of the accounts receivable to obtain line of credit
Details: The president of a now-defunct New Jersey-based marble and granite wholesaler along with
his employees defrauded a bank in connection with a USD 17 million secured line of credit. They fabricated
many of the accounts receivable to obtain line of credit. To conceal the lack of sufficient collateral, he
and his employees created fake email addresses on behalf of their customers so they could pose as
them and answer the bank’s and outside auditor’s inquiries about the accounts receivable.
Source: NDTV
Web Link: https://tinyurl.com/y2ehwg6h

6. ED Attaches Assets Of Tamil Nadu Businessman Worth Over ₹ 20 Crore In

Indian Bank Fraud Case
Sector: Banking
Nature: Money laundering of loan proceeds
Modus: Obtained loans through forged documents showing inflated collateral security.
Details: The Enforcement Directorate (ED) has attached six immovable properties worth ₹ 20.65 Crores
of a Tamil Nadu-based businessman under Prevention of Money Laundering Act, 2002 (PMLA) in
connection with a bank fraud case. The accused managed to avail loan on the basis of fabricated docu-
ments in the name of his firms. These credit facilities became NPA to the tune of ₹ 23.46 Crore and
sanctioned amounts were diverted and siphoned off.
Source: NDTV
Web Link: https://tinyurl.com/y63j9t8u

7. CBI Raids In Madhya Pradesh Over ₹ 938 Crore Fraud Case Involving Oil Firm
Sector: Banking
Nature: Misappropriation of funds
Modus: Loan obtained by means of inflated financials and diverted the proceeds
Details: A CBI team on Saturday raided multiple locations in Madhya Pradesh's Morena over a bank
fraud case of over ₹ 938 Crore, involving an oil firm. It was alleged that forensic audit findings indicated
that the financials of the company, while applying for loan, were inflated, and that the loan amount was
misappropriated through fraudulent diversion. In 2015, banks tried to recover their loss by auctioning
their assets under the SARFAESI Act but failed due to unsatisfactory response to the bidding process,
Source: NDTV
Web Link: https://tinyurl.com/y2ogrdcz

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8. Bank fraud: ED slaps biggest ever FEMA notice of ₹ 7,220 Crore on Kolkata firm
Sector: Banking
Nature: Foreign exchange bank fraud
Modus: Unauthorized foreign exchange dealings, holding of foreign exchange outside India and siphoning
of funds
Details: As per ED, the alleged Jewellery company had huge outstanding for foreign bills drawn on
self-promoted companies in UAE. Bank funds availed by the company were routed in the export to these
foreign entities and others and the proceeds against the same were held outside India. They are also
charged under FEMA for wilful siphoning off a whopping amount of ₹ 7,220 Crore as export proceeds.
Source: Economic times
Web Link: https://tinyurl.com/y3xbxmjh

9. CBI files ₹ 1400 Crore Bank fraud case against dairy product manufacturing
firm
Sector: Banking
Nature: Diversion of bank funds
Modus: The firm falsified books of accounts, created false assets, liabilities and transactions with related
parties and diverted the bank funds
Details: The dairy manufacturing company is accused of ₹ 1,400 Crore fraud for cheating a consortium
of banks. The Central Bureau of Investigation (CBI) filed a fraud case after a complaint from one of the
Banks. The company is accused for diversion of bank funds, sham transactions with related parties,
fabricated documents/receipts, falsified books of accounts and creation of false assets and liabilities.
Source: Hindustan times
Web Link: https://tinyurl.com/y6gq5883

10. Promoters of a financial services enterprise involved in ₹ 729 Crore bank fraud
Sector: Banking
Nature: Cheating, collusion and misappropriation of funds
Modus: With the help of two bank employees the promoters siphoned off the credit amount.
Details: The two promoters of a group of financial services enterprises committed a ₹ 729 Crore fraud
by colluding with two bank officials against a subsidiary of the same enterprise. The promoters made
the subsidiary make fixed deposits of ₹ 750 Crore and later it was found that the bank had credited the
proceeds in a current account in the subsidiary’s name and later debited the sum without any prior
intimation. It is alleged that the promoters used the amount to square off the loan taken by them.
Source: Business Line
Web Link: https://tinyurl.com/y4v3lvxe

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11. Two senior Jammu and Kashmir officials suspended in ₹ 250 Crore bank
fraud case
Sector: Banking
Nature: Cheating, forgery and misappropriation of funds.
Modus: Sanctioned loan to a non-existent entity for misappropriation of funds
Details: A case was filed against two senior officials for sanctioning a loan to a non-existent co-operative
housing society. The case was also filed against the secretary of the said housing society and the
former chairman of the bank who sanctioned the loan. It was found that the loan of ₹ 250 Crore was
disbursed in favour of the non-existent society for the purpose of construction of a satellite township at
Shivpora locality in Srinagar, bypassing the credit policy of the bank and on the basis of false and fabri-
cated documents.
Source: Money control
Web Link: https://tinyurl.com/y45ogv9f

12. Bank fraud of ₹ 1203 Crore by a renowned Textile Company

Sector: Banking
Nature: Loan categorized as Fraud
Modus: A leading nationalised bank declares fraud of ₹ 1203 Crore fraud by a major textile and yarn maker
Details: A fraud of ₹ 1203.26 Crore is being reported by the bank to Reserve Bank of India (RBI) in the
accounts of the company. The bank has already made provisions amounting to ₹ 215.21 Crore, as per
prescribed prudential norms. It is said that the company is undergoing substantial financial stress and
severe liquidity constraints coupled with changed industrial dynamics, time and cost overrun in completion
of its projects. It has defaulted to repay the interest on its debentures too. The creditors of the company
have filed a petition for the company’s corporate insolvency resolution process.
Web Link: https://tinyurl.com/y3zzlmsq

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 4. Taxation frauds

1. Chennai Man arrested for 107 Crore GST Fraud

Sector: Taxation
Nature: GST Credit fraud and forgery
Modus: Availed GST credit using tax invoices issued to fictitious companies.
Details: A man along with some other people who were registered on fake names and addresses committed
a GST credit fraud of ₹ 107 Crore on invoice value of ₹ 740 Crore by creating fictitious companies which
issued tax invoices to various entities without supplying any goods or services.
Source: Business Line
Web Link: https://tinyurl.com/yxokuut3

2. 1,377 Exporters fraudulently claim ₹ 1,875 Crore IGST Refund

Sector: Taxation
Nature: Fraudulently availed IGST Refund
Modus: Exporters who have deceitfully availed IGST refund are now untraceable
Details: The Finance Ministry has said that 1,377 exporters have fraudulently claimed IGST Refund of
₹ 1,875 Crore including 10 ‘star exporters’ who are now untraceable at their principal place of business.
Adverse reports have also been received on 3 star exporters.
Source: NDTV
Web Link: https://tinyurl.com/y5y6zwe4

3. Pan-India Fake Invoice Racket of Nearly ₹ 434 Crore Unearthed by DGGI

Sector: Taxation
Nature: Misutilisation of Input Credit and forgery
Modus: Obtain GST registrations on the basis of documents of unrelated individuals and carryout bogus
transactions.
Details: 23 firms across India, Tamil Nadu to New Delhi, were involved in issuance of fake invoices to
get fraudulent Input Tax Credit (ITC) without supply of any goods. The value of fake transactions was
₹ 434 Crore through which ₹ 78.13 Crore of fraudulent ITC was availed.
Source: News 18
Web Link: https://tinyurl.com/y5y6zwe4

4. I-T department conducts raids regarding ₹ 1000 Crore money laundering case
Sector: Taxation
Nature: Operating a money laundering racket through bogus transactions.
Modus: Obtained bogus advances from shell entities for opening retail showrooms.

RED FLAG INDICATORS REPORT Page | 13

 Details: The IT Department conducted raids against certain Chinese individuals and their local contacts
for operating a money laundering racket using fictitious companies. The subsidiaries of a Chinese company
had taken over ₹ 100 Crore bogus advances from shell entities for opening retail showrooms in India.
Search action also revealed that at the behest of Chinese individuals, more than 40 bank accounts were
created in various dummy entities, entering into credits of more than Rs 1,000 Crore over the period.
Source: Times of India
Web Link: https://tinyurl.com/y43dk62w

5. ₹ 173 Crore GST fraud unearthed from Gujarat

Sector: Taxation
Nature: GST Credit fraud
Modus: Availing fraudulent input credit through shell companies.
Details: A few people had setup four companies in different parts of Gujarat which were shell companies
set up with false documents. The officials said that the accused used the shell companies to claim fake
Input Tax Credits on products of ₹ 173 Crore.
Source: Ahmedabad Mirror
Web Link: https://tinyurl.com/y2vu9t7s

6. Madhya Pradesh Cement Firm Director Arrested Over ₹ 17 Crore Tax Fraud
Sector: Taxation
Nature: GST fraud
Modus: Clandestinely supplied cement without payment of GST
Details: The GST intelligence officials have detected over ₹ 17 Crore tax evasion by a major cement
manufacturer in Madhya Pradesh and arrested one of its directors. They also conducted multiple
searches at various premises belonging to the cement manufacturer in the states of MP and UP. More
than four lakh tons of excess limestone has been procured of what has been declared in the formal
records of the company and the cement and clinker manufactured have been supplied secretly without
payment of GST.
Source: NDTV
Web Link: https://tinyurl.com/y44p4v3y

7. GST intelligence officers arrest promoters of an Indian company dealing in

spirits in alleged tax evasion case
Sector: Taxation
Nature: GST fraud
Modus: Supply of hand sanitizers without payment of GST

RED FLAG INDICATORS REPORT Page | 14

 Details: GST intelligence officers have arrested promoters of Liquor Company after the agency detected
alleged tax evasion of ₹ 7.97 Crore in the supply and sale of alcohol-based hand sanitizer. The retail
price of the sanitizers supplied without payment of 18% GST comes around to ₹ 20.40 Crore with a
volume of about 14 Lakh litres of hand sanitizers. Search was conducted and total of non-GST paid sanitizers
worth ₹ 19 Crore were seized
Source: Economic Times
Web Link: https://tinyurl.com/y455s6ox

8. A racket of clandestine clearance of cigarettes through a factory, runs in Kota

Sector: Taxation
Nature: GST fraud
Modus: Supply of gutkha and cigarette without payment of GST
Details: The Madhya Pradesh unit of the DGGI claimed to have unearthed tax evasion of more than
₹ 500 Crore on part of a gutkha and cigarette manufacturer in Indore. The owner of the company was
arrested too for evasion of GST payment.
Source: Hindustan Times
Web Link: https://tinyurl.com/ybtc3kh4

9. GST evasion of transporters, “passers” in Punjab

Sector: Taxation
Nature: GST credits diversification
Modus: Alleged involvement of transporters, “passers” or mediators and officials to facilitate the GST
evasion in Punjab
Details: Justice of Punjab said the matter involved reaching ramification varying from allowing non-payment
of input credit/modified value added tax (MODVAT) to the government to an eventuality where credit
of tax paid on some other product was used for something else. The petitioner was allegedly paid
₹ 8,25,000 during past three years. There were indicators that minor penalties imposed and recovered
in cash by the petitioner were even not deposited in the government treasury.
Web Link: https://tinyurl.com/y2wlx7es

10. ₹ 300 Cr bogus GST billing scam

Sector: Taxation
Nature: GST bogus bills
Modus : Rajkot SGST department sleuths arrested a duo alleging mastermind of ₹ 300 Crores bogus
billing scam.
Details: The officials reported that the accused duo had floated eight firms on paper to generate bogus
GST bills. The scam came to light after officials raided 35 premises in Junagadh, Manavadar, Keshod,
Dhoraji and Mangrol in July and August. The mastermind behind this 300 crore bogus billing scam was
arrested by the Rajkot SGST department.
Web Link: https://tinyurl.com/yyg5bo2d

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 5. Insurance Frauds

1. Two men staged fake car robberies to claim insurance money

Sector: Insurance
Nature: Cheating and forgery
Modus: Staged fake car robberies to claim insurance money
Details: The police have arrested two men who would avail car loans through fake identities and forged
documents to buy a car and later stage fake robbery of the same car to claim insurance money. They
have done this at least twice and till date they have cheated banks to the tune of ₹ 42 Lakhs.
Source: NDTV
Web Link: https://tinyurl.com/yxrghhvs

2. Indian-Origin Mother, Daughter Get Jail For Insurance Fraud In US

Sector: Insurance
Nature: Insurance fraud
Modus: Purportedly burned down their convenience store to fraudulently obtain insurance proceeds.
Details: The mother instructed an informant to burn down the convenience store she owned by offering
him USD 5,000. Both the mother and daughter were sentenced to 18 months and 9 months in prison
respectively by US District Court Judge. In addition to their prison sentences, they were ordered to pay
a total fine of USD 7,500 and a fine of USD 2,500.
Source: NDTV
Web Link: https://tinyurl.com/yxch8v6u

3. Spurious phone calls and fraudulent offers

Sector: Insurance
Nature: Cheating
Modus: Making fraudulent calls to insurance holders to sell made up fake schemes
Details: Insurance Regulatory and Development Authority of India (IRDAI) has observed that policyholders
are receiving fraudulent calls giving unrealistic benefits such as unclaimed bonus, agency commission,
refund of investment amount / growth amount etc which they can claim if they pay certain amount to
the caller. The callers are using names such as Insurance Transaction Department, RBI or any other
name of existing government agencies and misleading the public. The IRDAI has stated that it is not
directly involved in such sale of insurance or finance products.
Source: IRDAI
Web Link: https://tinyurl.com/yxqdyv5s

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4. Fraudulent Website in the name of IRDAI
Sector: Insurance
Nature: Cheating
Modus: Fake website selling insurance products.
Details: IRDAI has issued a notice stating that a fake website with the domain name -
www.irdaionline.org.in is selling insurance and advertising about exams conducted by IRDAI. IRDAI has
stated that it does not sell any insurance products and will take action against those who sell the same
without license.
Source: IRDAI
Web Link: https://tinyurl.com/y4phngtm

6. Corporate frauds

1. CBI case against Indian limited company for siphoning off funds from Mumbai
airport.
Sector: Corporate
Nature: Misappropriation of funds
Modus: Funds were siphoned off using fictitious work contracts and revenue was under-reported
Details: Mumbai International Airport (MIAL) has to pay 38.7% of its revenue as an annual fee to
Airports Authority of India (AAI) and use balance earnings for airport's maintenance. Upon investigation
it was found that, promoters of a group company in MIAL, their executives and unidentified officials of
AAI siphoned off the funds for personal benefits of their family and relatives using bogus work
contracts, inflating the company's expenses, and under-reporting revenue. This fraud caused a monetary
loss of up to ₹ 705 Crore.
Source: Money Control
Web Link: https://tinyurl.com/yb964jon

2. SEBI penalizes 12 individuals for fraudulent trading

Sector: Corporate
Nature: Fraudulent trading
Modus: Entered into transactions without intending to transfer beneficial ownership and violated the
provisions of PFUTP (Prohibition of Fraudulent and Unfair Trade Practices) norms.
Details: The regulator levied a penalty of ₹ 18 Lakh on 12 individuals for fraudulent trading in a financial
services company, which needs to be paid jointly and severally. The entities had entered into transactions
without intending to transfer beneficial ownership, in the off-market or on-market legs and overall beneficial
ownership was not transferred. These trades gave a misleading appearance of trading in the securities
market.
Source: SEBI
Web Link: https://tinyurl.com/y5s4fbva

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3. SEBI imposes market ban on 7 entities
Sector: Corporate
Nature: Non-compliance of regulations
Modus: The 7 entities flouted norms in the issuance of a listed company’s shares under preferential
allotment
Details: The case is related to the issuance of shares on preferential allotment basis to more than 49
entities in March 2012 without complying with "public issue" framework prescribed under the ICDR
(Issue of Capital and Disclosure Requirement) Regulations. In an order passed, SEBI said allotment of
shares by the listed company was in the nature of a public issue. However, the offer document was not
filed, and various false documents were filed with SEBI to contend it as a private placement. Regulator
SEBI has barred seven entities from the capital markets for up to seven years and the directors have
been restrained from holding any managerial position or associating themselves in any capacity with
any listed firm for three years
Source: SEBI
Web Link: https://tinyurl.com/y2le2bk2

4. SEBI fines former IT Firm official ₹ 10 Lakh for insider trading

Sector: Corporate
Nature: Insider trading
Modus: Insider trading by former key person of the firm.
Details: SEBI has fined the former head of investor relations at an IT Firm which was involved in a major
financial fraud in 2009, with a penalty of ₹ 10 Lakh. SEBI found that the former head had price sensitive
information which was not made public then, through which he sold 14,500 shares of the firm on
December 15, 2008. The information was regarding a merger that the firm was going into and proposal
for the merger was put in front of the board on December 16, 2008 i.e. one day after he traded the
shares.
Source: SEBI
Web Link: https://tinyurl.com/y4t8eql2

5. SEBI bans 102 entities from markets for fraudulent trading in an Engineering
Services Firm
Sector: Corporate
Nature: Fraudulent and manipulative trading.
Modus: Creating artificial volume of trading through connected entities.
Details: SEBI has barred 102 entities for a period ranging from one year to seven years from the capital
markets for being involved in fraudulent and manipulative trading in the shares of an engineering
services firm which had almost no trading of shares. In 2011, two new promoters acquired 60% shares
and through their connected entities controlled supply of the shares. They also went for a preferential

RED FLAG INDICATORS REPORT Page | 18

 allotment and through this connected entities released shares in lot at a frequent interval by selling
them at a price more than last trading price. This created a visual of considerable trading in shares at a
high price at the expense of general investors.
Source: SEBI
Web Link: https://tinyurl.com/y3sxmd33

6. SEBI orders impounding of over ₹ 1.38 Crore in insider trading case of a Jewellery
Concern.
Sector: Corporate
Nature: Insider Trading
Modus: Avoided losses by insider trading conducted by the Chairman and his two daughters.
Details: SEBI has ordered an impounding of ₹ 1.26 Crore, ₹ 9.62 Lakh and ₹ 2.09 Lakh from Chairman of
the Jewellery company and his two daughters respectively for avoiding unlawful notional losses by
selling their shares. They avoided losses on the basis of price sensitive information which was not
public yet which was regarding the company’s poor quarterly results of 2017. The Chairman sold over
30 Lakh shares while his two daughters who are also the vice-presidents of the company, sold their
entire shareholding.
Source: SEBI
Web Link: https://tinyurl.com/y4k9fdlm

7. A leading financial corporation used 2.6 Lakh fraud accounts in fake branch
to siphon funds
Sector: Corporate
Nature: Fake Branch and customer accounts
Modus: A leading financial corporation used 2.6 Lakh fraud accounts in fake branch to siphon funds
Details: The ‘branch’ created fake accounts using names of account holders who had already repaid in
full and had no obligations against the corporation, to siphon out ₹ 11,750 Crore. The branch does not
physically exist and is just a facade and cover-up created for giving effect for sanctioning and disbursal
of loans. Based on the emails recovered, the branch accounts got direct fund transfers from the corporations'
treasury accounts
Web Link: https://tinyurl.com/yxs34usb

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 7. Financial frauds

1. Two arrested for duping people posing as custom officers

Sector: Financial
Nature: Cheating
Modus: Obtained money from people posing as custom officials by promising parcels from abroad.
Details: Two individuals impersonated themselves as customs officials and directed the victim to pay
custom fee ₹ 47,900 and other subsequent amounts. They had influenced the victim through matrimonial
site and got their personal contact number through which they manipulated him and extracted ₹ 69 Lakh
from him so far.
Source: Delhi Police Press Release
Web Link: http://www.delhipolice.nic.in/press-release.html

2. Quarterly financial results leaked through WhatsApp chat

Sector: Financial
Nature: Unpublished price sensitive information (UPSI)
Modus: Financial information of a listed bank were leaked on WhatsApp before official announcement
by the company
Details: SEBI penalized one person with a fine of ₹ 15 Lakhs for releasing unpublished price sensitive
information (UPSI) related to financial results of a listed bank through WhatsApp messages prior to the
official announcement by the company. WhatsApp chats were extracted from the 190 seized devices.
On examining, it was found that earnings data and other financial information of around 12 companies
including the Bank were leaked through WhatsApp messages
Source: SEBI
Web Link: https://tinyurl.com/y3qh8sty

3. Unauthorized investment services provided by an individual

Sector: Financial
Nature: Cheating
Modus: Provided unauthorized investment services without holding the certification of registration as
an investment advisor
Details: The proprietor of a market research and advisory company acted as an investment advisor and
provided unauthorized trading tips to investors assuring his clients of 100 per cent return, which is a
misleading and deceptive act. He carried out these activities without holding the certificate of registration
as investment advisor which is prima facie, in violation of the IA (investment advisor) Regulations.. He
has been barred from the capital markets till further orders.
Source: SEBI
Web Link: https://tinyurl.com/y4mny7a5

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4. SEBI bans individual for providing unauthorized investment services
Sector: Financial
Nature: Misleading the public, Cheating
Modus: Providing unauthorized investment services to clients.
Details: SEBI has barred an individual from carrying out investment advisory activities after finding that
he was providing unauthorized investment tips to investors. He provided advisory services in stock
cash, stock futures, Nifty futures, etc. through which he collected over ₹ 12 lakh from his clients. SEBI
observed that he was not registered as an investment advisor under the IA (Investment Advisory) Regu-
lations. He had lured a client with the promise of giving trading tips on Commodity Derivatives Traded
at MCX with 95% accuracy.
Source: SEBI
Web Link: https://tinyurl.com/y67qqvw8

8. Cyber frauds

1. Alina Point-of-Sale Malware Spotted in On-going Campaign

Sector: Cyber Security
Nature: Malware infection
Modus: Threat Actors used DNS to exfiltrate payment-card information.
Quantum and impact: A venerable point-of-sale (POS) malware called Alina that’s been around since
2012 is back in circulation, with a new trick for stealing credit- and debit-card data: Domain Name
System (DNS) tunnelling. In April, threat actors employed Alina to siphon off payment-card information,
then used DNS to exfiltrate it.
“To do this, malware authors encode the stolen information and issue a DNS query to the actor-controlled
domain name,” according to the researchers’ analysis, issued on Wednesday. “The encoded data is
placed in a subdomain, which the malicious actors then extract when they receive the DNS query. The
stolen data is subsequently sold in underground criminal markets.”
Source: https://threatpost.com/alina-point-sale-malware-ongoing-campaign/157087/

2. Try2Cry Workable Ransomware tries targets Windows OS

Sector: Cyber Security
Nature: Ransomware attack
Modus: malicious installation of open source exe files from Github
Quantum and impact: Try2Cry is one of the ransomware that is quite interesting with its own feature,
and its open-source feature makes it a member of the Stupid ransomware family. Try2Cry initially looks
for any movable drives that are connected to the settled computer, and then it assigns a copy of itself,
which is named as Update.exe to the root folder of every USB flash drive.

RED FLAG INDICATORS REPORT Page | 21

 Once it has done so, it will hide each file on the portable drive and will substitute them with Windows
shortcuts along with the same icon. So, if you click them, then all these shortcuts will open the original
file and will also start the Update.exe Try2Cry ransomware payload in the background. The Try2Cry
ransomware uses the Rijndael encryption method, the predecessor of AES; here, the password of this
encryption is robust and reliable. The encryption key is produced by measuring a SHA512 hash of the
password and utilizing the initial 32-bits of this hash.
Source: https://tinyurl.com/y8gw9mlk

3. Avaddon Ransomware Still Using Excel 4.0 Macros

Sector: Cyber Security
Nature: Ransomware attack
Modus: Ransomware through Excel 4.0 macros.
Quantum and impact: Excel 4.0 macros, which were introduced by Microsoft in its MS Office products
in the early 1990s, gained good popularity among cyber attackers for its effectiveness in targeting
potential victims. Recently, new malware was seen using this trick to target its victims.
Avaddon searches for data to encrypt and then appends its own extension to encrypted files, dropping
a ransom note in each folder that it affects. That links to a payment site accessible via the Tor network
containing a unique ID that the victim can use to log in. They then see a ransom amount and instructions
on how to pay.
Source: https://www.infosecurity-magazine.com/news/avaddon-ransomware-still-using/

4. Orange confirms ransomware attack exposing business customers' data

Sector: Cyber Security
Nature: Ransomware attack
Modus: Data Breach through “Orange Business Solutions” divisions
Quantum and Impact: French telecommunications company Orange has confirmed that it suffered a
ransomware attack in the month of July that resulted in hackers accessing the data of 20 enterprise
customers that were stored in a targeted server.
On 15th July, 2020, the ransomware operators behind the Nefilim Ransomware added Orange to their
data leak site and stated that they breached the company through their "Orange Business Solutions"
division. As part of the ransom operators' leak, a 339 MB archive file was published titled
'Orange_leak_part1.rar' that contained data that was allegedly stolen from Orange during the attack.
Source: https://tinyurl.com/y5btm2dm

RED FLAG INDICATORS REPORT Page | 22

5. New cyber security policy to be implemented in India: PM Modi
Sector: Cyber Security
Nature: Strengthening of Cyber Security
Modus: Development of new Cyber security policy
Quantum and Impact: With the internet facility available to almost everyone from the wealthiest to the
day to day earners and linkage of banks accounts with the e-wallets the theft has also significantly
increased.
“Participation of rural India and villages in Digital India is necessary. We are rapidly expanding our
optical fiber network. It will reach every gram panchayat within 1,000 days.” He added.
PM Modi stated that government to soon unveil a new cyber security policy while delivering his seventh
consecutive Independence Day speech from the iconic Red Fort.
Source: https://tinyurl.com/y5rkdhtp

6. Hackers stole 738GB of data from Australian government agency.

Sector: Cyber Security
Nature: Data Breach
Modus: Unknown
Quantum and Impact: More than 180,000 New South Wales residents are believed to have been caught
up in a major cyber security breach after a state government department was compromised earlier this
year.
Service NSW on Monday morning confirmed the large number of people likely impacted in the breach
which was first reported publicly by the Government in May.
Those caught up in the "criminal attack" are now set to be informed by the department via registered
post in the coming days.
Service NSW chief executive Damon Rees confirmed the scale of the incident in a statement, saying
millions of documents may have been compromised.
"The investigation, which began in April, engaged forensic specialists to analyse 3.8 million documents
in the accounts," he said.
"This rigorous first step surfaced about 500,000 documents which referenced personal information."
Source: https://www.hackread.com/hackers-stole-738-gb-data-australian-government-agency/

7. Five cheated in Ahmedabad by threat artists.

Sector: Cyber Security
Nature: Fraud and Siphoning attack
Modus: Luring for better deal.
Quantum and Impact: Siphone attacks are being commonly witnessed in India from June onwards. One
of the most luring method was also witnessed by 3 person in Ahmedabad which suffered a loss of
₹ 2,13,150/-

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 In the time of the pandemic masks have become an essential which lead to a fraud of ₹ 60,000/- for a
business man in order to crack a deal of 3M 8210 masks. Luring of job has also become common in this
pandemic which cost a youngster aged 21 ₹ 52,000/-
Source: https://tinyurl.com/yxlra9ne

8. Hackers obtained COVID-19 patient database in protest at treatment of

Indian health workers
Sector: Cyber Security
Nature: Data Breach
Modus: Website Penetration
Quantum and Impact: Hackers claim they have accessed the personal data of 80,000 COVID-19 patients
in New Delhi stored on a local government website, in protest at the treatment of beleaguered healthcare
workers.
The Kerala Cyber Hackers group says it broke into the Delhi Government’s Delhi State Health Mission
website in less than 10 minutes on Saturday night.
“We are not satisfied with the Delhi Government’s approach towards the healthcare personnel… Thus, to
show our protest, we were on an errand to obliterate [the] Delhi State Health Mission website,” the Kerala
Cyber Hackers wrote in a Facebook post.
Source: https://tinyurl.com/y52gvvor

9. Lloyd banks customers targeted by sophisticated Phishing Scams

Sector: Cyber Security
Nature: Phishing
Modus: Fake emails and SMS.
Quantum and Impact: An estimated 100 people have reported receiving fake communication purporting
to be from Lloyds, which is one of the largest banks in England and Wales.
In the email scam, a realistic-looking email using Lloyd’s logos and branding is distributed containing
the subject header: “Alert: Document Report – We noted about security maintenance.” The message,
which has spelling errors and some Chinese characters, claims that the recipient’s bank account has
been compromised, stating: “Your Account Banking has been disabled, due to recent activities on your
account, we placed a temporary suspension until you verify your account.” Users are then redirected to
a fraudulent site called Lloyds [Dot] bank [Dot] unusual-login [Dot] com, which attempts to trick visitors
into believing it is legitimate through the use of official branding. The site then requests customers’
log-in details including passwords, account information and security codes and other person data.
Source: https://www.infosecurity-magazine.com/news/phishing-scam-lloyds-bank-customers/

RED FLAG INDICATORS REPORT Page | 24

10. 7 VPN services leaked data of over 20 million users, says report
Sector: Cyber Security
Nature: Data Leak
Modus: Unprotected database server
Quantum and Impact: Nearly 1.2TB worth of personal user information was leaked from seven Virtual
Private Network (VPN) services. As per reports, the breach was possible as these VPN services did not
have any mode of password authentication for the user data logs or API access.
The database contained data about the devices on which the VPNs were installed, such as the origins’
IP addresses, Internet Service Provider, actual location, device model, type and ID, as well the user’s
network connection.
One of the seven VPN services - UFO VPN - exposed user data in the form of plain text passwords, IP
address connections, geo-tags, user VPN sessions, etc.
A Comparitech report claims that the company was informed about the loophole, and it took more than
two weeks to fix the issue. UFO VPN further claimed that there was no loss of data. The Comparitech
report states that data of nearly 20 million users (both free and paid) amounting to 894GB was leaked.
A separate report by vpnMentor found that six more VPN services, namely Rabbit VPN, Fast VPN, Flash
VPN, Free VPN, Super VPN, and Secure VPN, were connected to a common developer, same as UFO
VPN.
Source: https://tinyurl.com/y3jrhz6m

11. Credit Card Skimmer Targets Microsoft ASP.NET Sites

Sector: Cyber Security
Nature: Stealing sensitive data
Modus: Fraudulently stealing credit details through skimming codes.
Details: Instances of credit card skimming i.e. wrongfully storing credit card details, through various
e-commerce sites have been reported. Attackers are targeting websites hosted on Microsoft’s IIS
Server running with ASP.NET Framework which is a web application framework. These attacks are
mostly affecting sports organizations, health, e-commerce websites, etc. which are identified to be
running an outdated version of ASP.NET Framework prone to vulnerabilities. The skimmer can extract
credit card passwords remotely by injecting skimming codes directly in the compromised JavaScript
library i.e. a library consisting of JavaScript functions.
Source: CERT-In
Web Link: https://www.cert-in.org.in/

RED FLAG INDICATORS REPORT Page | 25

12. Phishing Campaign Targeting Users of email.gov.in
Sector: Cyber Security
Nature: Phishing
Modus: Phishing email ids by spoofing email.gov.in homepage.
Details: CERT-In has observed that attackers are phishing identities of users of email service of Government
of India (email.gov.in) by creating fake email.gov.in homepage. Users get emails from attackers
pretending to be from National Informatics Centre (NIC) asking them to verify their account by clicking
a link to the spoofed fake website. The users enter their login credentials and the attackers steal such
credentials and use such phished email accounts to send malware containing emails to other Government
Organizations. These malware can steal sensitive information by finding its way in the targeted organization’s
network.
Source: CERT-In
Web Link: https://www.cert-in.org.in/

13. Vulnerabilities detected in Google Android and Google Chrome

Sector: Cyber Security
Nature: Sensitive data leak
Modus: Possible attack to obtain sensitive data by a remote attacker.
Details: Multiple vulnerabilities have been detected in Google Android and Google Chrome which could
allow a remote attacker to obtain sensitive information and execute an automated arbitrary code. These
vulnerabilities exist in Framework, System, Media Framework, Google Play System updates, Qualcomm
components, etc of Google Android which can be exploited by the attacker. Google Chrome has insufficient
policy enforcement in extensions, insufficient data validation in media and many more discrepancies.
CERT-In has advised users to install all timely device updates and upgrade to new version of Google
Chrome.
Source: CERT-In
Web Link: https://www.cert-in.org.in/

RED FLAG INDICATORS REPORT Page | 26

 9. Health care Frauds

1. Fake Covid-19 Reports issued by lab in Amritsar

Sector: Healthcare
Nature: Cheating and misleading people
Modus: Issuance of fake COVID-19 positive results
Details: The lab owners and its staff in Amritsar have been booked for charges for endangering the lives
of the people by issuing fake reports of COVID-19. Three complaints were registered against the private
lab where in all the three cases, COVID-19 tests were conducted which declared the patients positive
who were in fact declared negative when retesting was done from a different institution or department.
Source: Hindustan Times
Web Link: https://tinyurl.com/yxeoytpb

2. Covid Cure Fraud in Delhi

Sector: Healthcare
Nature: Cheating and Duping
Modus: Claimed to have cure for COVID-19 and duped people for money
Details: The fraudster posed as a doctor, called the victim and told him that he had recently recovered
from COVID-19 and expressed his willingness to donate his blood plasma as a cure for the disease.
Once the victim transferred the fees, the fraudster switched off his phone. In another case, rare medicinal
cure for COVID-19 was sold on the dark web where once the payment was made, the page was deleted.
Source: India Today
Web Link: https://tinyurl.com/ycr2ocro

3. Bangladesh Hospital Owner Arrested for Issuing Thousands of Fake COVID-19

Test Results
Sector: Healthcare
Nature: Cheating and Duping
Modus: Issuance of fake COVID-19 tests results for a fee
Details: A hospital owner in Bangladesh has been arrested on charges of fraud to a tune of about
$350,000 for allegedly issuing thousands of fake COVID-19 test results to deceive people. He took
advantage of the delay in testing of people and provided fake negative test results and fake documents
certifying they did not contract the coronavirus. He charged them a fee even after agreeing with the
government that he would provide those services free of charge
Source: News18
Web Link: https://tinyurl.com/y5m8m393

RED FLAG INDICATORS REPORT Page | 27

4. Meerut Hospital Sealed, License Revoked for Providing Fake COVID-19
Negative Report
Sector: Healthcare
Nature: Cheating and Duping
Modus: Issuance of fake COVID-19 negative tests results for a fee
Details: A video has gone viral in which a hospital employee is seen offering a fake negative coronavirus
report for ₹ 2,500 in Uttar Pradesh’s Meerut. The hospital is involved with some people in making negative
fake reports of COVID-19 test from the district hospital in exchange for money so that they can avoid
getting quarantined.
Source: Go News India
Web Link: https://tinyurl.com/yxn6bzdy

5. Charged in $69M fraud scheme, allegedly misrepresented COVID-19 blood test

Sector: Healthcare
Nature: Manipulation
Modus: A medical lab inflated their covid-19 test sales to the tune of $69 million
Details: A medical technology company had a lab that offered microarray technology to test for
COVID-19 and allergies. The president of the company allegedly misrepresented their test sales and
financial condition to potential investors and sent tweets about non-existent partnerships with several
reputed organizations to mislead investors and manipulate stock prices. Through such means he
conspired to commit healthcare fraud by submitting more than $69 million in false claims for COVID-19
and allergy testing
Source: Becker’s Hospital Review
Web Link: https://tinyurl.com/y3vqtwfx

6. Former hospital executive charged in $1.4B billing scheme

Sector: Healthcare
Nature: Cheating and misappropriation of funds.
Modus: Created an "elaborate pass-through billing scheme" through shell companies.
Details: A former executive of hospital and nine others billed private insurance companies about $1.4
billion for laboratory claims as part of a fraudulent billing scheme. They took over struggling rural hospitals
and then used those hospitals as shell companies to bill private insurers for expensive blood tests and
urinalysis drug tests processed at outside labs. The labs were allegedly controlled by them, and the
claims were submitted using billing companies they also controlled. The private insurers were made to
believe that the tests were performed at the hospitals using higher rates allowed by rural hospitals.
Source: Becker’s Hospital Review
Web Link: https://tinyurl.com/yxr82ovc

RED FLAG INDICATORS REPORT Page | 28

7. Hospitals fined in Maharashtra for excess billing
Sector: Healthcare
Nature: Violation of ICMR Guidelines
Modus: Hospitals are charging excess amounts from COVID-19 patients.
Details: A hospital in Dombivli has lost its license after the Kalyan Dombivli Municipal Corporation
(KDMC) found that the hospital had charged for a bill over ₹ 6 Lakh. Another similar incident was reported
in Nagpur, where the hospital was fined ₹ 5 Lakh for overcharging the patients and is also asked to
return the excess ₹ 6.86 Lakh taken from 18 patients. A FIR is also filed against a renowned hospital in
Mumbai for overcharging patients and the same is under investigation.
Source: Economic Times, The Week, The Hindu
Web Link: https://tinyurl.com/y42gfwdm
https://tinyurl.com/y52nvlh5
https://tinyurl.com/yys2th9z

10. General Frauds

1. PM-Kisan norms eased for Covid, TN probes ₹ 110 Crore fraud, 18 held
Sector: General
Nature: Siphoning of funds through illegal beneficiaries
Modus: The officials involved in the scam allegedly shared the login and password details of beneficiaries
with brokers
Details: Under the PM-Kisan or Pradhan Mantri-Kisan Samman Nidhi Scheme, ₹ 6,000 is paid annually
to a member of a landholding family, in three instalments. Many people who were added onto the list of
beneficiaries illegally were reportedly unaware of the fraud with most of the spike coming from a few
districts. The men posed as officials asking them for their details so that they could receive “Corona
cash” from the government. Through such means, ₹ 110 Crore-plus was siphoned off
Source: Indian Express
Web Link: https://tinyurl.com/y3w9tsxb

2. Seven Charged In ₹ 50 Crore Public Distribution System (PDS) Fraud In

Madhya Pradesh
Sector: General
Nature: Illegal hoarding of commodities
Modus: Hoarded huge quantities of various commodities meant for PDS beneficiaries to sell in the open
market at a sizable profit

RED FLAG INDICATORS REPORT Page | 29

 Details: Seven people from Madhya Pradesh have been charged under Essential Commodities Act and
the Indian Penal Code for forging documents related to transportation of rice. They sold less rice, wheat,
kerosene to authorized PDS beneficiaries and hoarded huge quantities to sell in the open market at a
sizable profit. Irregularities to the tune of ₹ 50 Crore have been unearthed and is expected to swell to
₹ 100 Crore.
Source: NDTV
Web Link: https://tinyurl.com/y3h53vqj

3. Indian National Arrested In $21 Million H-1B Visa Fraud Case

Sector: General
Nature: Visa fraud
Modus: submitted fraudulent application containing false statements for H-1B specialty-occupation
work visas
Details: The alleged used four corporations to arrange the improper submission of fraudulent applications
for H-1B specialty-occupation work visas. He induced foreign nationals to come to the US and reside in
the US for commercial advantage using fraudulently obtained H-1B visas. He generated gross profits
from 2011 to 2016 of approximately $21 million using such means.
Source: NDTV
Web Link: https://tinyurl.com/y3acd9fz

4. Court Frames Charges Against 12 In Multi-Crore Fraud against Udhampur

Businessman
Sector: General
Nature: Cheating
Modus: 12 people duped an industrialist on the pretext of selling him a precious metal at cheap rates.
Details: Local industrialist was tricked by 12 persons for purchasing some "precious metal" for a sum
of ₹ 5.60 Crore. All 12 accused are prima facie guilty of committing offences of cheating and fraud and
are indicted.
Source: NDTV
Web Link: https://tinyurl.com/y4oaffcw

5. Man from Haryana held for job fraud

Sector: General
Nature: Employment Fraud
Modus: Duping individuals by giving fake offer letters and obtaining money
Details: A man’s Paytm account was frozen containing ₹ 1,90,000 obtained from duping individuals by
assuring them jobs through social networking sites like LinkedIn. After promising a job to an engineer,
he sent him fake job offer letter and other documents and in return asked him to pay ₹ 77,880 through
Paytm.
Source: NDTV
Web Link: https://tinyurl.com/yyubge8o

RED FLAG INDICATORS REPORT Page | 30

Prepared by:

Akif Cheulkar Vishnu Murugan Karuna Kapadi

Partner Article Assistant Article Assistant

Aniket Bhakte Sanket Bhalbar

Article Assistant Article Assistant

CONTRIBUTOR TO THE DOCUMENT

Huzeifa Unwala
Maharashtra Lead Partner

RED FLAG INDICATORS REPORT Page | 31

 DISCLAIMER
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RED FLAG INDICATORS REPORT Page | 32

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