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A New Kind of Fraud?

Recently, Naavi.org has received information about a new kind of fraud from Chennai. This fraud targets new IT companies which ae eagerly looking for software projects.

The apparent fraud is played out as follows.

A new IT company looking out for projects recruits a software professional Mr Madhusudan.  He suggests that the Company may benefit by using the services of a consultant, Mr Subramanyam who has recently returned from abroad where he was working.

Subramanyam promises a lucrative project from a company in Germany where he was earlier working. He gives a contact person Mr Dmitry in the German firm and the Company exchanges some e-mails. The contact invites the Company for a discussion with a very short notice. Company officials find it difficult to get Visa. Subramanyam suggests that he is travelling to Germany on some other work and if the company wants can have discussions about the project. Company agrees. He keeps contacting the Company on e-mails and then returns after a fortnight stating that the meeting was succesful.

Company invests further in recruiting a few more persons at the instance of Mr Madhusudan and project team is formed. The team keeps working on prototype and time passes until the Company realizes that the project cannot continue. The team which has worked for nearly 6 months offer to resign en-mass.

At this time the Company gets some doubt on the genuinity of the project and tries to contact the German company. It finds that there is no person in the Company by the name Dmitry. They also find that some of the mails sent by Mr Dmitry appear to originate from Chennai.

The Company in search for a project is now poorer by several lakhs of rupees in terms of salary and other expenses incurred on the team along with loss of precious time.

Could this be a genuine failure of a business project? Or is it a new kind of fraud?.. Further investigation may reveal the truth.

In the mean time, Naavi.org invites companies to report if they have faced similar instances. They are also advised to be on guard with such fake project vendors and ensure that they check the veracity of claims made by consultants particularly when the promised project is from abroad and it is difficult to establish its genuineness.



August 24, 2008