In a turn of events that would raise an eyebrow even on Gordon Gekko, India’s notorious maximum-security prison has added an unexpected amenity to its list of amenities: a profitable stock market operation. Yes, gentlemen and ladies, Tihar Jail, India’s most notorious criminals are locked up there, has somehow become the latest hotspot of financial wheeling and dealing, but not of the straight-and-narrow kind. Step aside Wall Street, Dalal Street has some competition, and it’s behind the concrete walls and iron bars.
The case came into the public consciousness when the Chandigarh Cyber Crime Police stumbled upon a case that is eerily reminiscent of a Bollywood crime thriller with an added money swindle. One convict, Chander Mohan Singh, apparently felt that incarceration was merely a minor obstacle to overcome in his schemes. Whereas ordinary prisoners might while away the days reading or engaging in some physical exercise to amuse themselves, Singh established something that can best be described as a “cell-side” stock trading desk and operated an Internet stock scam, defrauding investors out of a staggering 3.66 crore rupees.
The ingenuity of the scam cannot be exaggerated. From the confines of his cell, Singh and his co-conspirators created the “P15 Stock Market Exchange Club” on WhatsApp, a name impressive enough to fool unsuspecting victims. This virtual den of deception attracted investors like Surinder Kumar Thakur, who was enticed by promises of returns that would make even the most brazen hedge fund managers blush. These digital-age snake oil salesmen posed as professional analysts working for SMC Global Securities Limited, a well-established name in Indian financial markets, giving the scam the veneer of respectability.
This is not the first case when prisons have been unexpected centers of business activity. Over time, prisoners have mastered conducting business in prison. In 2022 in the Philippines, authorities discovered that inmates at the New Bilibid Prison were operating investment scams against overseas Filipino workers. The inmates used smuggled mobile phones to swindle victims into investing in shell companies and made millions of pesos before they were apprehended.
Tihar’s stock scammer case has all the signatures of modern-day financial fraud, made worse by technology.
Singh and his team created a phony application called SMCLE that mimicked real trading platforms, even the smallest details. The application was so well made that even savvy investors could not readily identify it as fake. This was not just a regular scam; but it was a hoax.
Singh’s operation employed clever psychological deception that was extremely effective. His team initially gained Thakur’s trust by providing accurate share price predictions, which is one of the common deceptions employed by fraudsters. Initially, they demonstrated they could be relied upon by providing information that was later proven true. After gaining Thakur’s trust, they exploited that trust. In this case, they withdrew money from Thakur’s bank account, withdrawing 3.66 crore rupees between February and March 2024 by falsely claiming to invest in “upper circuit” stocks using an “institutional account.”
“The house always wins” is a maxim applied to casinos, but to fraudulent investment schemes as well. The only difference is that casinos at least make no bones about the odds being against you. Singh’s scam promised good returns but nothing to investors.
What is most disturbing about this case is how simple it was for Singh to get the devices he required in order to implement his scheme. Handsets and internet access are prohibited in prisons, but in this case, something appears to have kept those rules from having any effect whatsoever. This is a huge question about security in what is meant to be one of the most secure environments in India. If something as easy to recognize as phones can find its way in, we have to ask ourselves what else might be getting in without being checked.
It is ironic that individuals engage in economic offenses in a prison designed to punish criminals. Tihar Jail, designed to prevent criminality, has instead facilitated its development. Some prisoners appear to view their convictions as not punishment but as opportunities to work at home without interruption.
This case is not unlike the much-publicized “Operation Jailbreak” scandal in 2018. In that case, seven prisoners at a South Carolina maximum-security prison used contraband cell phones to operate a “sextortion” racket. They preyed on military personnel and were successful in extorting over $500,000 from their victims. Similar to Singh, these prisoners used technology to which they should not have had access in order to perpetrate crimes that were far outside the confines of their prison.
The cyber world of today’s finance has made it extremely simple for crimes to be committed. Bank robberies, counterfeiting, and in-person scams used to need people to be present. Now, financial criminals need a smartphone and Wi-Fi to steal money from victims. When such devices are used by individuals with bad intentions and lots of free time on their hands, like those in jail, it provides an environment where high-tech scams can thrive.
The Chandigarh Cyber Police probe indicates that Singh was not alone but was probably part of a group, perhaps with networks nationwide or even worldwide. This is characteristic of what we encounter in cybercrime, where operations usually span borders, using legal variations to evade detection. The solo scammer days are largely behind us; financial fraud today is increasingly the product of organized crime networks with specialized roles for each member.
What is most disturbing here is the manner in which it shows the evolution of white-collar crime in India. We have moved from physical share certificates and direct contact to a stage where a couple of taps on a smartphone can transfer crores of rupees to criminals. Online platforms have facilitated investments, but they have also brought in vulnerabilities that are being rapidly exploited by criminals.
In response to these events, authorities are warning people to be careful before investing online, especially when approached by unofficial channels like WhatsApp or Telegram groups. This is good advice, but it is ironic that we need to warn people against investing based on tips from prisoners in jail. If the phrase “Don’t invest on tips from convicted criminals” is not yet part of common sense, then maybe our education system has more to answer for than we thought.
As this case develops, it is a reminder that in today’s digital era, physical barriers, even prison walls rarely get in the way of determined perpetrators. For every security measure used, it appears that there is a countermeasure just waiting to be found. It’s a cat-and-mouse game using technology where the cost is not only the safety of our prisons but also the financial health of would-be victims.
“The market can be irrational for longer than you can stay solvent,” economist John Maynard Keynes famously said. In the Tihar stock scam, we might argue that criminal ingenuity can sometimes outlast institutional safeguards. The question now is whether our systems of regulation and technology can catch up fast enough to plug the holes that allow such schemes to thrive.
Meanwhile, the best punishment for Singh might be to make him invest his stolen money in the real stock market at the worst possible time; no fake apps, no manipulated returns, just the cold hard truth of seeing his investments tank along with his freedom. That would be fitting punishment that fits squarely with Wall Street’s most lurid cautionary tales.
