Visakhapatnam Police Uncover ₹56 Crore Fraud in Co-operative Society Targeting Vulnerable Communities

Police in Visakhapatnam have exposed a sophisticated financial fraud scheme exceeding ₹56 crore ($676,000), in which a co-operative society allegedly exploited the trust of marginalized communities by invoking social reformer Dr. B.R. Ambedkar's ideology while promising unusually high returns on deposits. The investigation has revealed a complex web of shell companies, benami properties, and diverted funds affecting more than 2,500 depositors, predominantly from Scheduled Castes and middle-class families who invested their life savings.

At a press conference on December 5, 2025, Deputy Commissioner of Police Manikanta detailed how Sneha Mutually Aided Co-operative Society Limited (MACS) and associated entities systematically collected public deposits before allegedly misappropriating the funds through personal accounts, fake companies, and real estate acquisitions across multiple districts in Andhra Pradesh.

Background and Context

Mutually Aided Co-operative Societies in India operate under a legal framework designed to promote financial inclusion and community-based economic empowerment. These institutions are particularly important in rural and semi-urban areas where access to formal banking services remains limited. The Sneha MACS case represents a significant breach of trust in this sector, where societies often position themselves as community-oriented alternatives to commercial banks.

According to police investigations, Sneha MACS leveraged social symbolism to build credibility among vulnerable populations, presenting itself as inspired by Ambedkar's principles of social justice while operating under the slogan 'Pay Back to Society.' This approach allegedly created a false sense of security among depositors, many of whom belong to communities historically excluded from mainstream financial services.

Key Figures and Entities

The investigation has identified several key individuals allegedly responsible for orchestrating the fraud. Police have issued Look Out Circulars against Katikala Swarna Latha, president of Sneha MACS; A Punnarao, serving as CEO/Director; and Gummadi Manoranjan, another director. While several staff members and benami operators have been arrested, the primary accused remain at large as international travel restrictions are pursued.

Financial records reveal that deposits were allegedly diverted through a network of related entities including Sneha MACS branches in Hyderabad and Ponnur, Sneha TV, United Publications, Prudhvi Constructions, and Sneha Priya Financial Services. These companies allegedly served as conduits for laundering deposited funds while creating the appearance of legitimate business operations.

Legal and Financial Mechanisms

The fraud scheme allegedly operated through classic financial manipulation techniques combined with sophisticated obfuscation methods. By promising abnormally high interest rates—well above prevailing market rates—the society attracted substantial deposits from community members seeking better returns than those offered by traditional banks.

Police inquiries indicate that once collected, these funds were allegedly transferred through multiple layers of transactions involving personal accounts and shell companies before being converted into immovable properties. Investigators have identified approximately ₹56.10 crore in recoverable funds, while the society's payable deposits amount to around ₹55.10 crore, suggesting near-complete diversion of investor capital.

The asset recovery process has identified numerous properties allegedly purchased with misappropriated funds, including 21.12 acres at Venkannapalem/Rayapurajupeta in Chodavaram, 0.47 acres at Duppituru in Yelamanchili, 1.50 acres at Dabbanda in Anandapuram, 2,450 square yards near Sheelanagar STBL area, and a 2,125 square foot flat at Chinna Waltair. Authorities have geo-tagged these properties and initiated restrictions on transactions while working to attach assets for eventual liquidation.

International Implications and Policy Response

This case highlights significant regulatory gaps in India's co-operative sector, where oversight mechanisms have struggled to keep pace with increasingly sophisticated financial crimes. The targeting of marginalized communities using social justice narratives represents an especially troubling evolution in financial fraud tactics.

Financial regulators in India have been strengthening supervision of non-banking financial companies and co-operative societies following similar high-profile fraud cases. The Sneha MACS investigation may prompt additional reforms, including enhanced disclosure requirements for co-operative societies and stricter monitoring of related-party transactions.

The case also underscores the vulnerability of economically disadvantaged populations to financial schemes that combine social messaging with promises of exceptional returns. Consumer protection advocates are calling for greater financial literacy programs in marginalized communities and more robust verification systems for financial institutions claiming social purposes.

Sources

This report draws on official statements from the Visakhapatnam Police Department, court filings related to the First Information Reports registered at Duvvada, Dwaraka, Gopalapatnam, and II Town police stations, and publicly available information about India's co-operative society regulatory framework. The investigation referenced property records from sub-registrar offices in Andhra Pradesh and financial documentation provided by victims during the police inquiry.