Fake US defence deal: Racket used money chain model to build network in Kerala

Kochi: The international racket that swindled ₹700 crore by claiming to have secured a US Department of Defense weapons contract had spread its operations across Kerala through a money chain model scheme that incentivised investors to become recruiters.

Beginning in 2025, the company initially lured victims with promises of profit sharing, a lifetime US visa, a Green Card and lucrative job opportunities in the United States. Once drawn into the scheme, investors were converted into commission agents to recruit more people.

Under the scheme, investors were rewarded for bringing in new recruits. An investor who introduced a new victim received a commission equivalent to 20 per cent of the amount deposited by that person as an Earnest Money Deposit (EMD). The commission increased to 25 per cent on the investment made by the second recruit and 30 per cent on that of the third. A cycle was considered complete once three new investors had been brought into the company. The fourth recruit became the first member of the next cycle, with the commission structure repeating itself.

Those caught up in the scheme also included investors who completed five or six such cycles, each time recruiting three new members and earning commissions that ran into crores of rupees. Some of them were eventually appointed as company employees too.

One such investor, a glass merchant from Thrissur, invested ₹5.25 crore in VPVV Techno Construction Limited through 15 separate transactions between May 16 and October 17, 2023, after becoming ensnared in the commission network. In another case, a resident of Kozhikode sold his house and property before investing ₹2.5 crore in the scheme. The scale of the operation is further evident from the fact that the company paid ₹12 crore in commission to an agent who facilitated a ₹40 crore investment from a New Delhi-based businessman, identified as Vijay Kasa.

Two retired Kerala Police officers of Superintendent of Police (SP) rank are alleged to have played a pivotal role in running the money chain operations of the fraudulent company. Complainants have furnished evidence to central investigation agencies alleging that the officers used their influence to derail investigations when victims approached the police and to dilute the charges invoked in FIRs. The complainants have also moved the court seeking a CBI probe into the case. Separately, a complaint has been filed before the Registrar General of the High Court against an advocate, alleging that proceedings on the petition were deliberately delayed.

Inside the VPVV network
The name of the shell company, VPVV, is said to have been derived from the names of Vinod Varrier, Pradeep Kumar and Venkitta Venkit. Over time, however, the first two individuals began distancing themselves from the company's operations to project Venkitta Venkit as its chairman and public face.

Those recruited into the racket were led to believe that 'Doctor Saab,' the mastermind behind the scheme, served as the company's patron and spiritual guide.

They were also told that the company had been entrusted with highly confidential weapons manufacturing projects for both the United States and India. To bolster this narrative, recruits were informed that all information relating to the company constituted `official secrets' of the two countries and therefore had to be kept strictly confidential.

As an added measure, new members were made to take an oath of secrecy administered by `Doctor Saab' himself.