Kasaragod: A brazen daylight abduction in Kasaragod has exposed a shadow inter-state network dealing in withdrawn ₹2,000 notes, allegedly bought at a discount, possibly for laundering. Police say the Andhra Pradesh-based buyers were instead duped by a Kasaragod gang, which extorted ₹7.5 lakh after allegedly displaying fake ₹2,000 notes and luring them to the district.

Kasaragod Town police have booked eight people -- four from Andhra Pradesh and four from Kasaragod -- in two separate cases involving kidnapping, illegal detention, extortion, impersonation, threat and assault. The case, investigators say, is far from over.

“This is only the first layer. It appears to be a complicated operation. We are still trying to understand the business model,” said Kasaragod Assistant Superintendent of Police Nandagopalan M.

A broad daylight abduction
Around 12.15 pm on Wednesday, police received an alert that a man had been abducted from in front of the Udupi Arya Bhavan restaurant at Karanthakkad, one of Kasaragod’s busiest junctions.

The restaurant’s security guard said a black Scorpio registered in Andhra Pradesh’s Kadapa district pulled up outside, a few men jumped out, bundled a masked man into the SUV, and sped away. The man offered no resistance, he said.

By the time police officers reached the spot, the vehicle had crossed the state border. What helped crack the case was the presence of mind of the security guard, who noted the registration number: AP 40 EU 1277.

Kasaragod District Police Chief B V Vijaya Bharath Reddy immediately alerted police in Dakshina Kannada, Hassan, and Andhra Pradesh. Within two hours, Karnataka’s Hassan police intercepted the vehicle at Sakleshpura, nearly 160 km from Kasaragod.

Inside were four men from Andhra Pradesh and the abducted victim, Mohammed Hanifa (36) of Melparamba in Kasaragod.

The men from Andhra Pradesh were identified as Sidana Omkar (25) from Chennareddypalli in Nellore district; Maruti Prasad Reddy (33) from Ganganapalli in Ananthapur district; and Srinath A (26) and Prithviraj Reddy (31) from YSR Kadapa district.

A ₹2,000-note racket
Interrogation threw up a startling revelation. According to police, a Kasaragod-based gang had promised the Andhra Pradesh gang large quantities of ₹2,000 notes, which the RBI phased out in 2023. “They were talking in lakhs of rupees,” said ASP Nandagopalan.

The RBI introduced the ₹2,000 note in November 2016 after the sudden withdrawal of the ₹500 and ₹1,000 notes. In May 2023, it withdrew the ₹2,000 denomination from circulation, too, but retained its legal-tender status. It directed people and businesses to exchange or deposit the notes at its 19 issue offices. An RBI report on October 1 said 98.35% of the ₹2,000 notes had been returned, though notes worth ₹5,884 crore remain in circulation.

The Andhra Pradesh gang buys the notes at a 50% discount, possibly to launder them through RBI issue offices, a sub-inspector investigating the case said. But the Kasaragod gang showed the gang fake ₹2,000 currency notes and lured Sidana Omkar to Kasaragod. When Omkar saw the currency notes, he realised they were fake, the SI said. “The Kasaragod gang also realised that Omkar saw through their deception and detained him. They threatened him and extorted ₹7.5 lakh from him,” the officer said.

One of the Kasaragod gang members even posed as a police officer and threatened to expose their business racket, the ASP said.

After receiving the money, the Kasargod gang released him. But Omkar returned with his gang and abducted Hanifa to get back his money, said the sub-inspector.

Based on the Kadapa gang’s statement, the Town Police picked up three Kasaragod men: Sharif M (44) of Bekal; B Noorudheen (42) of Bevinje in Chengala; and K Vijayan (55) of Bendichal in Chemnad panchayat. They already had Mohammed Hanifa (36), who was rescued.

Of the ₹7.5 lakh extorted, ₹6.5 lakh was transferred to Sharif’s bank account, and ₹1 lakh was taken in cash, said police. Sharif, said to be the kingpin, and Noorudheen are accused of several financial cheating cases.

The Kasaragod group has been booked for illegal detention, extortion, threat and impersonation, and was produced before the court late at night, the ASP said.

The Andhra Pradesh gang was produced before the court in the afternoon, and they were remanded in judicial custody. The Kerala gang was produced before a judge late in the night, said ASP Nandagopalan.

He said the four men from Andhra Pradesh and the four men from Kasaragod did not have regular jobs or businesses. Police hinted that the Andhra Pradesh gang may be linked to a YSR Congress politician.

Nandagoplan said his team had not yet recovered any ₹2,000 from the Kasaagod gang. “But what we know is just the first layer,” he said.