"The seven persons arrested from different locations used to pose as Railway and NTPC officials and issue fake appointment letters to unemployed youth after collecting lakhs of rupees from them," Rachakonda Police Commissioner Mahesh M Bhagwat said.
The police seized Rs 20 lakh in cash, fake appointment letters and ID cards from the accused.
Bhagwat said that the accused used to charge amounts ranging from Rs 2 lakh to Rs 10 lakh per person after convincing the aspirants that they could facilitate jobs at NTPC and Railways through a "backdoor entry".
He said that the main accused, Shaikh Mohammed Kasim, along with six other accused, was caught during a decoy operation based on a tip-off. Kasim is an aeronautical engineer, the officer added.
Seven other members of the gang are absconding, the Commissioner said.