Four Indians charged for defrauding NRI of $18 million

Four Indians were indicted on Dec.13 for defrauding a non-resident Indian (NRI) business-owner in the United States of $18 million. The Federal Court in Seattle, Washington issued an Indictment Order against the four Indians, reported Mid-Day

The US Department of Justice is expected to approach the Indian government to seek extradition of Madhavi and her brother Satish Vuppalapati, who are both wanted in the case and believed to be in Hyderabad. While one of their associate Srinivas Sista is believed to be in India, another associate, Guru Prasad Rao is believed to be in the United States.

“While the Indian government is keen to extradite business tycoon Vijay Mallya from London for duping banks, the US government is also serious about getting back mastermind Madhavi and Satish for committing fraud on their soil. The noose will get tighter in coming days, and arrest of all wanted accused is imminent,” said Kiran Kulkarni, the complainant and founder of Kyko Global Inc., reported Mid-Day.

An extensive investigation was carried out by both the Federal Bureau of Investigation (FBI) and Department of Justice for the past three years in order to expose a well- planned and executed multi-million white collar crime in the United States, before the perpetrators could flee and return to India.

Kulkarni had consolidated his family activities of financing and private equity under Kyko Global Inc., and Kyko Global GmbH (collectively, Kyko) in 2009. His companies are trade facilitation firms that offer accounts receivable factoring services, which is a form of commercial financing.

Prithvi Information Solutions Ltd. (PISL) was an Indian BSE-listed company owned by the fraudsters. It is an IT services company incorporated in India that provided technology services and software development to various American companies. While Satish Vuppalapati is the managing director of PISL, his sister, Madhavi Vuppalapati is the chairperson and the director.

In mid-2011, Vijay Kumar, a chartered accountant in Hyderabad, approached Kyko for financing for PISL. He then introduced Satish Vuppalapati to Kyko and he presented a successful picture of his company saying that it is in business with multinational companies like Microsoft and Huawei. Kyko agreed to a factoring relationship, which worked seamlessly until February 2013. The payments stopped after that. Upon investigation, Kulkarni discovered that the customers were fictitious and he had been duped of $18 million.

Kyko has made allegations under the Racketeer Influenced and Corrupt Organizations Act (RICO) and of financial fraud, mail fraud and wire fraud. For two years, the BSE-listed company, defrauded Kyko. Madhavi Vuppalapati and Prithvi Information Solutions had created fictitious customers and bogus invoices to deceive Kyko, it was revealed through investigations.

The Indian company falsely represented big businesses like Dick’s Sporting Goods, Enterprise Product Partners, Financial Oxygen, Huawei, and L3 Communications as their clients, reported Mid-Day.