Daijiworld Media Network – Mangaluru
Mangaluru, Oct 21: A large-scale fake gold loan scam has come to light across Karnataka, where fraudsters are pledging counterfeit gold ornaments to secure loans worth crores of rupees. Co-operative societies and finance institutions have emerged as the primary targets of this network. The fake ornaments are reportedly being brought from Mumbai, Uttar Pradesh, and Visakhapatnam, and circulated across the state through agents operating on a commission basis.
The counterfeit jewellery appears identical to real gold but contains only about 20–30% genuine gold, making it extremely difficult to detect. The ornaments are crafted using an iron base coated with two to three layers of gold plating to give them a realistic shine. Recently, the arrest of three persons in connection with a fraud of Rs 6.24 lac at the Atmashakthi Co-operative Society in Panjimogaru, Mangaluru, has further exposed the depth of this racket.
Fake ornaments manufactured outside the state are supplied to local agents in Karnataka. These agents identify individuals in need of money and use them to pledge the fake gold at co-operative societies or finance companies. About 10% of the loan amount is given to the person pledging the gold as commission, while the remaining amount is divided among the agents and the main operators behind the scam. A similar case involving a fraud of Rs 9.25 lac has also been reported at the Odiyoor Co-operative Society in Puttur.
The role of gold appraisers in co-operative societies has come under scrutiny. According to regulations, pledged gold must be cut and tested before being rejoined, but in the rush to issue loans, many institutions skip this step. In some instances, gold testers have allegedly colluded with fraudsters by certifying fake gold as genuine.
Co-operative societies that have been defrauded often claim compensation from insurance companies, leading to further financial losses for insurers. Such cases have been reported across the state, and police investigations are underway to trace the entire network behind this widespread scam.
In Dakshina Kannada alone, several similar incidents have been recorded, including at Atmashakthi Co-operative Society in Panjimogaru, Shri Vividoddesha Souharda Co-operative Society’s Puttur branch in Odiyoor, and Anugraha Vividoddesha Co-operative Society’s Beltangady branch in Ujire.