The story of Abdul Karim Telgi, known to many as Karim Lala, is one of “Rag to Riches” built on the foundations of a scam so huge that the official number comes up to 30,000Cr. This scam had Telgi selling forged stamps and other legal documents across 12 states, with the help of at least 300 agents, spread across India.
The scandal shook multiple state governments, especially the state of Maharashtra, also leading to the arrest of an Ex-Commissioner of Police.
Today we will take a look at the fascinating story of the man who sold counterfeited pieces of paper to the entire nation, for at least a decade. We’ll look at where he was born, his first stint as a counterfeiter, and also go on to learn about how he managed to run such a massive operation until the very end.
The scam originated from the counterfeiting of Stamp paper, the one used in the making of judicial and non-judicial agreements. But before we dive in, it’s important to understand the main subject of this article.
Table of Contents
What is a Stamp Paper?
A stamp paper is an A4 size piece of paper valued at prices varying from Rs. 10 to Rs. 2,000.
The value of this paper depends on the purpose of creating the agreement; The higher the value of the agreement, the more the value of the stamp paper. This said value attached to the paper is called Stamp Duty, which is a form of indirect tax charged by the government of the respective state where the stamp paper is obtained from.
There are 14 different varieties of stamps, including those used for insurance documents, and notaries. They are available in 10 denominations in each category.
Now that we know what a stamp paper is, lets move into Telgi’s back story!
Who is Abdul Karim Telgi?
Abdul Karim Lad Saab Telgi was born in Belgaum district of Karnataka in 1961. His father was a Class IV Indian Railways officer, who died when Abdul was young. His family faced a dire need for money, which led Telgi to start selling fruits & vegetables at the Mumbai Railway Station to earn a living.
After having received his B.Com degree, Telgi moved to Mumbai to pursue a career. He was hired as a Sales Executive at Fillix, India. However, he was fired from the job due to poor performance. He was then hired as a Manager of Kishan Guest House, where he was not satisfied with the job which he left quite soon because of his laziness.
From a very young age, Telgi was a very ambitious man but at the same time, quite lazy & incompetent to work under anybody. After leaving the job at Kishan Guest House, he thought of moving to the Middle East to earn a living there.
He moved to Saudi Arabia in 1980, where he spent the next 7 years of his life, giving birth to his first business idea: Tourism scams. He saw travel agents used to send people to Saudi Arabia for employment via illegal ways, better known as Pushing.
The Origin and Backstory
Although one might assume that his counterfeiting career began with the Stamp paper, Telgi actually began his journey counterfeiting Passports. Upon his return to Mumbai, he decided to start his own Company called Arabian Metro Lines, which sent ambitious laborers to the Middle East, where they could possibly earn more money.
The man had built his network so strong in the past 7 years, that it facilitated this entire operation smoothly. Telgi was able to create an easy passage to even those fellow customers who required an Immigration Check. The demand for his service grew, fuelled by an Indian’s dream to earn on foreign land.
But as times changed, Immigration norms got quite stricter, making it harder for Abdul to run his racket. In 1991, few people who were supposed to travel abroad did not receive their clearance which led them to sue Abdul for his activities.
Due to this, the business came under the radar of immigration authorities. In 1993, he was booked under the VISA racket crime. He was taken into custody by the MRA Marg Police Station in Mumbai.
Now, Was This a Punishment or a Blessing in Disguise?
The moment turned out to be less of a punishment & more of a networking opportunity when Telgi met Ram Ratan Soni, who was in jail for fraud committed on the Indian Stock Exchange. Soni, who was a government Stamp Vendor from Kolkata had contacts with government officials & other politicians.
Both criminal minds got their prime time together to discuss how to execute one of the largest scams in the country. The idea was to exploit the almost unregulated government office of the Stamp Paper at the time. Telgi & Soni wanted to create fake stamp papers, which was equivalent to minting their proxy currency & trading it in exchange for an Indian rupee.
Telgi went on to meet Samajwadi Janata Party’s MLA Anil Gote, and asked him to arrange a meeting with the then Revenue Minister of Maharashtra’s Government Vilasrao Deshmukh. After this successful meeting, Telgi was able to acquire the necessary license to open his own stamp paper office in Mumbai in 1994.
Loopholes Exploited
Maharashtra’s Inspector General of Stamps, Nitin Kareer, pointed out that 85% of the documents bearing stamps have to be mandatorily registered with the sub-registrar of the stamp department. However, Abdul Karim Telgi, who was a licensed stamp vendor in 1994, seemed to have found a loophole in the stamp vending system.
Telgi was interested in the other 15% that could easily pass the eye of the law without having to be registered by the sub-registrar. He mastered the art of counterfeiting these papers, thus saving himself the headache of dealing with the sub-registrar.
These stamps were used for share transfers and insurance policies. These almost never came under routine scrutiny because of which counterfeits could easily vanish into the system without a trail.
As per Mr. Kareer, had the government compulsorily imposed the use of a franking system (which was made compulsory after the scam), this fraud would not have succeeded.
Where Scam Meets Strategy: Telgi’s Own Press
In 1994, Telgi and Soni went on to acquire scrap machinery from the Indian Security Press located in Nashik. The machine was then used to print the replica of the stamp papers printed by the Government.
Telgi then created a network of distributors to whom he sold the stamp papers at 20% – 30% commissions. Those rates were outrageous compared to the negligible 3% offered by the Government. This attracted vendors from across the country to partner up with Telgi.
In 1996, Telgi, through his most powerful connections, managed to set up his press on Mint Road in Mumbai. By using his links, he purchased multiple machines that were declared obsolete. Over the next 7-8 Years he continued to sell these fake stamp papers to top companies and banks at heavy discounts.
Telgi also sold counterfeits of judicial court fee stamps, special adhesive stamps, revenue stamps, foreign bills, insurance policies, brokers notes, share transfer certificates, insurance agency stamps, and other legal documents.”
It is reported that Telgi bribed employees at the Indian Security Press in Maharashtra to help him create an artificial shortage of stamp paper in the Market. It is said that his team dispatched documents worth several hundred crores to places that did not exist, to create this scarcity.
His business scaled up quickly in no time. He was able to run the scam in over 12 states, employing over 900 people across the country to help run it. An astonishing 120 bank accounts were opened to smoothly run these operation. Telgi’s business seemed like it would never run into a dark tunnel until…..
Fraud and Forgeries Unleashed
Sometime in the 1990s, Telgi was in the limelight for allegedly throwing away 80-90 Lakhs in a single night (True figures remain unclear) on a dancer he was fond of. Telgi was well protected by his inner circle in the Mumbai Police which allowed him to pull off such a stunt. However, this very incident did have an impact that brewed curiosity in the minds of the public.
In August 2000, two of Telgi’s Men were arrested in Bengaluru, while smuggling fake sheets. Police Interrogation of these Men led to multiple raids conducted across Bengaluru, in which the officials seized an estimated Rs. 9Cr worth of fake stamps paper and other forged legal documents.
Telgi’s phone was also tapped and the police kept a strict watch on him. In November 2001, he was on a religious pilgrimage at Ajmer, Rajasthan, when the Police arrested him & put him behind bars.
A Special Investigation Team (SIT) under the name STAMPIT was set up to investigate the scam, led by IPS Officer Sri Kumar. Further Investigations revealed that Indian Security Press was involved in the scam. It was found that its entire department had helped Telgi by providing it with the technology to forge stamp papers.
IPS Sri Kumar, in an interview, said, “Telgi was a tough nut to crack. He never gave free information. Instead when cornered with evidence, he confirmed or denied”. The team even conducted a NARCO test on Telgi, in hopes of getting some leads that they could investigate.
Unmasking The Faces Behind It All
The NARCO test conducted by STAMPIT revealed the names of Chaggan Bujhbal, Deputy CM of Maharashtra, and Sharad Pawar, Union Agricultural Minister. However, Telgi later admitted that he was nervous and conscious during the test, and only let out those names to spread controversy. This led to the deletion of those two names from the investigation.
In 2003, Social Activist Anna Hazare filed a Public Interest Litigation (PIL) with the Bombay High Court, alleging the then Commissioner of Mumbai Police R.S. Sharma for improperly handling the Telgi case.
Responding to the PIL, the Bombay High Court ordered the Maharashtra Government to appoint an officer to head the probe. This led to S.S. Puri, a Retired Director General of Police heading the case with the help of IPS Subodh Jaiswal.
The SIT then went on to arrest 54 people, including Anil Gote and MLA Krishna Yadav of Telugu Desam Party. Further, even Commissioner Sharma was arrested after his retirement for allegedly protecting Telgi.
The case was then transferred to the CBI department, which found some big names like the Former Joint Commissioner of Mumbai Police (Crime Branch), the former Deputy Commissioner of Mumbai Police, and a suspended IPS officer. Many cases were filed against these officers by the CBI.
In 2006, Telgi pleaded guilty and was given 30 Years of rigorous imprisonment along with a fine of Rs. 202 Cr. Although, this might seem to many as the end of Telgi’s rule, it was actually the quite opposite of it.
The End of It, Or the Beginning Of Something More…?
Telgi allegedly received the most VVIP treatment in Jail. He continued his operations from the prison. STAMPIT’s investigation revealed that in the early 2000s, he used mobile phones to run his operations. In 2002, interrogation of a few officers in charge of Telgi’s cell admitted to providing him cell phones regularly to conduct his operation.
The Police then tried to tap Telgi’s phone, however, Telgi was always one step ahead of the law. He would always find out that his phone was being tracked by the police, upon which he would change his number.
Every time he changed his mobile number, the police had to run around to secure permission to track that respective number, which took several days. Telgi was well aware of this and made sure to exploit every loophole in the Indian Judicial System. In 2017, the High Court convicted two prison officials relating to the supply of mobile phones in prison.
Facing The Consequences …
In 2005, a tax demand of Rs 120 crore was levied on Telgi, which was one of the highest tax liabilities imposed on an individual at the time. In the AY1996–97 alone, the Tax Department evaluated his income to be Rs. 4.54Cr, of which Rs. 2.29Cr was “unaccounted“.
Case Closed
Telgi was declared HIV positive in 2002. As of 2005, Telgi was suffering from Hypertension, and diabetes as well. As per a few reports, Telgi claimed that he was denied treatment for his ailment and left to suffer in jail.
On October 23, 2017, Telgi passed away at the age of 56, due to multiple organ failures at Victoria Hospital, Bengaluru.
A year after his death, the Nashik session court in Maharashtra cleared Telgi and seven others in the Stamp Paper Scam case. The court judge, P R Deshmukh, ruled that the case could not proceed further, due to lack of evidence.
Lessons Learnt
The scam exposed severe vulnerabilities in India’s administrative and regulatory systems. The scandal also led to reforms in stamp paper issuance and the digitization of stamp paper records.
Finance Minister Jaswant Singh at Lok Sabha said that the value of these fake stamp papers recovered by various investigative agencies was Rs 3,376Cr. He also said that since most of the stamp duties were payable to state governments, the loss of revenue for the Centre had been very little.
He also said that the government would recognize all transactions executed on these stamp papers as Genuine, and claimed no legal defect in any such documents.
State Governments of Karnataka and Maharashtra imposed the use of franking machines over the old Stamp Papers. A franking machine is intended to stamp impressions of dyes of approved design on private and official articles in payment of stamp duty.
With this, we finally reach the end of quite a long article. So what do you have to say about Abdul Kareem Telgi? Do you think such a fraud can occur again today? Do let us know in the comments below.
Written By Nasir Hussain
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