As the polarisation of wealth in India ramps up, so do the incentives to become a fraudster. Whilst most people we know have been at the receiving end of phone calls from the ‘boiler rooms’ in Jamtara or Indore, it is the fraud that is being perpetrated on the elite that is even more interesting. In our forensic analysis, we increasingly come across smart, suave fraudsters using sophisticated technology and India’s sprawling bureaucracy to their benefit. Representative of this type of fraudster is conman Sanjay Rai Sherpuria. As The Print says, “Sherpuria allegedly created over 56 companies under dummy directors, in which he pumped in funds as ‘start-up support’ to launder money. From waiting tables at a restaurant in Gujarat to reaching the power corridors of Lutyens Delhi with “direct access” to key politicians in the government and playing a “trouble shooter” for senior bureaucrats, including the ones serving in the CBI — Sanjay Rai Sherpuria managed many profiles in the last 20 years.”

New gen naughty people like Sherpuria typically originate from India’s booming middle class and tend to be well-educated i.e. poverty or Robin Hood type sentiments have nothing to do with the growth of this cottage industry in con: “Born in Assam, Sherpuria worked with his father Baleshwar Rai, who ran an army canteen in the cantonment area. Unhappy with a meagre income, he moved to Gujarat in 1999 and got a job with a restaurant in Ahmedabad as a waiter.

He went from waiting tables to managing and eventually owning the same restaurant within a few years. “He fell in love with the daughter of the restaurant owner and they married. That is what changed his life,” a second police source said.
Sherpuria’s wife Kanchan comes from an influential business family in Gujarat that owned petrochemical industries, hotels, restaurants and had political connections.”

In case you have been hiding under a rock and are unaware of the extent of Sherpuria’s activities, The Print article is worth reading in full. What we find interesting in Sherpuria’s modus operandi – and that of other people like him who we come across in our forensic analysis – is three things.

Firstly, the use of tech to build credibility is very original: “So elaborate was Sherpuria’s ‘con’ that he paid attention to the minutest of details. A Wi-Fi network named ‘PMO’, an address which mentioned ‘Race Course road’ and a PR agency that created multiple fan pages for him on social media. It all seemed to work well.

He would ask visitors to connect to his Wi-Fi network named ‘PMO’ whenever they complained about a weak signal, creating an impression that he had direct access to the network at Modi’s office.”

Secondly, social and conventional media is used systematically to build credibility and build a façade of power and muscle (this is something that the conmen have learnt to do from observing how listed crony capitalists work): “From hiring a bungalow in Central Delhi through his father’s connection, to flaunting links with politicians, he created a façade of being “close to the PMO”, which he then used to dupe people of several crores, police sources told ThePrint.

As part of that façade, he authored a series of books — including ‘I am Madhobhai: A Pakistani Hindu’, ‘Hindu Dharma Ki Dharohar: Bharatiya Sanskriti’, ‘Karhata Bengal’, and ‘Teachers’ —  which he managed to get released by eminent personalities such as governors and ministers in the BJP government, photographs of which he posted all over social media.

On the social media page of his foundation, along with ‘fan pages’ managed by the PR firm he hired, Sherpuria uploaded several pictures of him with eminent leaders, including PM Modi and RSS chief Mohan Bhagwat.

Besides that, he regularly wrote for Hindi newspapers Dainik Bhaskar, Amar Ujala and also featured in Forbes magazine for setting up a ‘lakdi’ (firewood) bank in Ghazipur to help the poor and marginalised perform the last rites of their family members with dignity, during the second wave of Covid. So much so that TV channels also ran documentaries on the “emerging entrepreneur…

He also hired a PR firm to make fan pages for himself, hired private security to build an impression that he is a VVIP, the source said.”

And thirdly, allying the preceding two points with the centralisation of political power in India and playing on the insecurities of India’s tens of thousands of ambitious civil servants and netajis: “According to the police, Sherpuria not only managed to deceive businessmen but also senior bureaucrats and officers, including that of the Central Bureau of Investigation, who often approached him with requests to “put in a good word” to the top leadership for  “transfers and postings”. And in most cases, he even managed to extend help…

Explaining his modus operandi, a third source said, “He would send expensive gifts to bureaucrats to make initial contact and then make small requests. He would also throw big names at their meetings. When the bureaucrat would google him, he would see his pictures with the top leadership on his social media page and get convinced about his credentials,” the source said.

“This is how many bureaucrats got convinced of his association with politicians and would often oblige him.””

Mr Sherpuria is currently in jail on charges of cheating & forgery under the Income Tax Act. Many more like him are waiting to prey upon upwardly mobile Indians who dream of wealth and power in this bustling republic.

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Note: the above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India as a provider of Portfolio Management Services. Marcellus Investment Managers is also regulated in the United States as an Investment Advisor.

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