Last year, the number of economic crimes reported in Andhra Pradesh stood at about 12,500, the third-highest after Rajasthan (20,377 cases) and Uttar Pradesh (14,556 cases), according to National Crime Records Bureau (NCRB) data.
The state has always been in the news for the high incidence of economic crimes involving multilevel marketing, closure of urban cooperative banks, bogus chit fund operators, online frauds, cloning of ATM cards, vanishing companies, fake currency, etc.
The financial loss reported from economic offences is much higher than that from thefts and burglaries. “In 2012-13, the total money involved in conventional crimes such as thefts and burglaries was Rs 93 crore, while the financial loss from economic offences was Rs 2,300 crore,” Mahendra Kumar Rathod, superintendent of police of the Economic Offences Wing (EOW) of the Andhra Pradesh Police, told Business Standard. These cases, which typically take years of judicial processes to get the accused convicted, are dealt with by EOW, which works under the state Crime Investigation Department (CID).
To tackle the growing menace of economic crimes, the state government had strengthened EOW through the past few years, besides bringing some of the best officials to this branch, including V S K Kaumudi, the officer in charge of investigating the fodder scam in Bihar during his three-year stint at Central Bureau of Investigation (CBI). He had also handled the Rs 7,000-crore Satyam Computer accounting fraud.
“The government had created lots of additional posts even at the branch level, including deputy superintendent of police and sub-inspectors. We were able to strengthen the investigation teams and form special squads at the range level,” Kaumudi, currently additional director-general of police (law& order), told Business Standard. About 600 additional posts were created in the department, the recruitment for which was done immediately, he added. Currently, the Andhra Pradesh EOW comprises about 700 personnel.
“One needs to coordinate with a lot of departments, including the I-T Department and the Enforcement Directorate to crack the case. There should not be any one-upmanship in this area,” Kaumudi said. Smuggling of red sand has been one of the latest focus areas of the department. To probe such cases, CID squads have been taking the help of a host of agencies such as Customs, Forest Department and the Directorate of Revenue Intelligence.
Another focus area is online ponzi schemes that collect money by enrolling members through a referral scheme. It is also probing firms that seek deposits by offering abnormally high returns. The state EOW has dealt with cases involving Speak Asia Online Ltd and Gold Quest, which lured people to deposit funds after promising high returns.
Initial public offering-related frauds, prevalent in the state in the last decade, have gradually disappeared, following the Securities and Exchange Board of India announcing stringent norms to protect investor money. Officers dealing with economic crimes now consider money circulation schemes a bigger threat. The police feel fraudsters use grey areas in the law to make quick money through such schemes.
The complex nature of economic crimes has been a challenge for EOW. And, the department has to cope with a large number of cases, as economic crimes are on the rise. “We are imparting continuous training to investigating officers by roping in subject experts on all aspects of economic crimes,” said Rathod. The state EOW has its own auditors to deal with crimes related to misappropriation of government money. Now, it is trying to set up similar teams for other economic offences.
“A CBI unit handles 24-25 cases in a year, but the state EOW has to investigate 150-200 cases,” a senior police official said, while responding to a question on the difference between the functioning of CBI and EOW.
