Kasaragod: An organised gang has been swindling cooperative banks in Kasaragod for nearly a year, pocketing lakhs of rupees by pawning gold-filled bangles, according to bank officials and police. Unlike gold-plated jewellery, these bangles, weighing around 8 grams each, contain 2 to 3 grams of gold, making it difficult for cooperative societies to detect the difference through the traditional stone-rubbing test.

"We have registered 13 cases and arrested six persons till now," said Kanhagad Deputy Superintendent of Police (DySP) Babu Peringeth. But the key suspect Mohammed Raees, who gave the gold-filled bangles to head-load workers and goods auto drivers to pawn for a commission, might have escaped to the Middle East, said police. The cases were registered based on the complaints filed by four branches of the Hosdurg Service Cooperative Banks in Kanhangad, three branches of the Nileshwar Service Cooperative Bank, the Cheemeni Service Cooperative Bank, the Kodakkad Service Cooperative Bank and the Thimiri Service Cooperative Bank.

The accused pawned 50 gold-filled bangles weighing around 400g to defraud the banks of Rs 18 lakhs. All these banks are in the south of Kasaragod district. The gang might have targeted more banks, but they often try to strike a deal with the accused to recoup their money and avoid unwanted media attention, said two investigating officers. However, this frequently alerts the suspects, giving them time to destroy evidence and escape, leaving the police empty-handed after house searches, they said.

Alert appraiser at Thimiri bank busts scam
On September 21, Rajesh K of Pettikundu in Cheemeni village walked into Thimiri Service Cooperative Bank's main branch at Nhanankai in Cheruvathur panchayat -- around 15km away -- to pawn four bangles weighing 32g. "He wanted a loan of Rs 2 lakh. But the moment our appraiser took the bangles in his hand, he realised it was fake," said the bank's manager Lankkesh OP.

When the bank employees detained him, Rajesh told them he bought the bangles from his friend Asharaf A P K of Amathala in Cheemeni village. They asked him to call Asharaf to the bank. When Asharaf arrived, they handed the duo to Cheemeni police. "When we spoke to them, we realised that there was a chain behind them and that they must have targeted more banks. That's why we called in the police," said Lankkesh. Soon, their arrests were shared on the WhatsApp groups of cooperative bank employees and banks decided to review the jewellery pledged with them, particularly those pledged by these two people.

On September 23, Cheemeni Service Cooperative Bank found that Rajesh K took a loan of Rs 1.99 lakh by pledging five gold-filled bangles at its evening branch. On September 24, Kodakkad Service Cooperative Bank's main branch at Kannadippara found that Asharaf took a loan of Rs 2.69 lakh by pledging seven gold-filled bangles weighing 55.3g. With this, the Department of Cooperation ordered an audit of the gold jewellery pledged with cooperative societies and banks. During the auditing, the officials found that the gang first targeted the Hosdurg Service Cooperative Bank's evening branch in Kanhangad in November 2023.

Mohammed Raees, who lived in a rented house at Arangadi in the town, took a loan of Rs 2.77 lakh by pledging five gold-filled bangles on November 9, 2023, and January 5, 2024. He also took another loan of Rs 1.32 lakh by pledging four bangles at Hosdurg Cooperative Bank's Arangadi branch. Saturday night, Hosdurg Station House Officer - Inspector Ajith Kumar P arrested K Babu, a loading worker from Padinjare Panakavu in Kanhangad town, in connection with the scam.

Babu took a loan of Rs 69,000 by pledging two bangles at Hosdurg Service Cooperative Bank in Kanhangad town on June 3. "He told us that Raees gave him the two bangles to pawn for a commission of Rs 5,000," the Inspector said. The charges against Babu are minor, which allows the officer to let him off on a station bail. "But I am not giving him the bail because the scam is bigger than the money he swindled. We need to question him and find out the others behind the fraud," he said.

Inspector Ajith and DySP Peringeth both hinted that Raees might have fled the country. By April, the gang started targeting banks in Nileshwar. On April 11, Rajesh P, a goods auto driver of Perole, took a loan of Rs 1.42 lakh from the Nileshwar Service Cooperative Bank's Market Branch by pledging four gold-filled bangles weighing 33.9 gm. On April 12, the following day, Rajesh took another loan of Rs 1.42 lakh by pledging four more bangles at the Nileshwar Service Cooperative Bank's Main Branch. The fraud came to light on Friday, September 27, and Nileshwar police registered two cases. Market branch manager V V Vinod said 25 to 35 per cent (2 to 3 g) of the bangles were real gold, making it difficult for their appraisers to detect the difference. The bangles had purity mark 916, the BIS logo, and the jeweller's identification mark such as MJ, he said.

The Market branch was targeted again by one Sumesh K V (38) of Kadinhimoola in Nileshwar, who took two loans of Rs 3.9 lakh by pledging 10 bangles weighing 83.7g on May 22 and June 19. Sumesh's friend Sunil M of Kadinhimoola also borrowed Rs 1.14 lakh by pledging three bangles at the Nileshwar Service Cooperative Bank's Evening Branch. Evening branch manager Manoj Kumar M said even the independent appraisers brought by the police could not detect the fake bangles. They had to break the bangles to find out that they were mixed with other metals, he said. Gold-plated jewellery typically has a very thin layer of gold (often less than 1 micron) and is easy to detect, he added. Main Branch manager Rakesh K R said that their inquiries found that Rajesh also got the bangles from Raees, and he has connections in Vadakara.

"Raees is the key link in Kasaragod. Private financiers may have also fallen victim to the scam, but they are unlikely to come forward. We made this public so that other banks are aware and can stay alert," said Rakesh. After the scam-hit three of the six branches of Nileshwar Service Cooperative Bank, it took a quick decision to buy gold analysers for all branches. The device uses non-destructive techniques such as X-ray fluorescence (XRF) to quickly and accurately assess the metal content without damaging the jewellery, he said. "It is expensive, but with fraudsters coming up with new ways, we too have to depend on technology to stay one step ahead," he said.

However, DySP Babu Peringeth said that the roles of the bank officials are also being investigated. "I told them that the managers and the appraisers are not off the hook," he said. It is true that the bangles cannot be identified as fake with one look, said Peringeth. "But then these banks are paying appraisers to spot exactly these types of frauds," he said. "They still rely on rubbing the jewellery on stones to verify the authenticity."The police investigation found that the fraudsters mainly targeted banks with quick and easy gold loan procedures, the officer said. "A special investigation team will be formed to look into the cases," he said.