CRED INR 12 Cr Fraud Case: Four Arrested In Gujarat

SUMMARY

The Bengaluru police have arrested an Axis Bank manager and three others from Gujarat who allegedly embezzled funds worth INR 12.5 Cr from the coffers of fintech unicorn CRED's parent entity

The fraudsters forged documents, including fake board resolutions, seals, and signatures, to gain unauthorised access to the company's corporate account held with Axis Bank’s

The accused executed 37 fraudulent transactions between October 23 and November 11 and opened more than a dozen mule accounts to launder the stolen funds

The Bengaluru police have arrested an Axis Bank manager and three others from Gujarat who allegedly embezzled funds worth INR 12.5 Cr from the coffers of Dreamplug Paytech Solutions, the parent company of fintech unicorn CRED.

The arrested individuals have been identified as Vaibhav Pithadiya, a relationship manager with Axis Bank in Rajkot; Parmar Neha Ben Vipulbhai, a banking agent hailing from Surat; Shailesh, an insurance agent based in Rajkot; and Shubham, a commission agent from Rajkot, Deccan Herald reported.

A person aware of the matter told Inc42 that no Cred user data was compromised in the attack. However, the fintech company declined to comment on the matter.

As per the report, the alleged mastermind behind the fraud scheme, Pitadia is said to have exploited his insider knowledge to perpetrate the crime. The suspects allegedly stole sensitive data and fabricated corporate internet banking (CIB) documents to carry out the fraud.

The police registered a case based on a complaint from Narasimha Vasanth Sastry, an executive at CRED.

The scam came to light on November 13 when Dreamplug’s executives caught suspicious transactions in the company’s accounts and found INR 12.5 Cr were siphoned off from two of its Axis Bank accounts.

The fraudsters reportedly forged documents, including fake board resolutions, seals, and signatures, to gain unauthorised access to the company’s corporate account held with Axis Bank’s Indiranagar branch in Bengaluru.

After manipulating account details with fake credentials and bypassing the security checks, the accused executed 37 fraudulent transactions between October 23 and November 11 and opened more than a dozen mule accounts to launder the stolen funds.

The police have recovered stolen funds worth INR 1.83 Cr while efforts are underway to recover the remaining amount.

Founded in 2018 by Kunal Shah, CRED initially offered rewards and benefits to premium credit card users for paying their bills. However, it has been on the super app path for the last few years and has launched many new services to monetise its user base.

Last month, it forayed into the insurance space in partnership with three insurance companies through its vehicle management platform CRED garage.

CRED is not the only new-age tech company currently embroiled in an embezzlement scandal. In October, reports surfaced that a former Swiggy employee had siphoned off nearly INR 33 Cr from the foodtech major’s business-to-business (B2B) arm, Scootsy Logistics.

Before that, in September, the Delhi police arrested Deepak Gupta, brother-in-law of BharatPe cofounder and former managing director Ashneer Grover, for allegedly misappropriating funds from the fintech company.