A 57-year-old chit fund operator, Paulraj, has been arrested in connection with an alleged ₹9-crore fraud in Kanniyakumari district, with more than 90 people reportedly affected. The District Crime Branch (DCB) arrested Paulraj in Chennai after an investigation found that investors who had deposited money in his chit fund schemes allegedly failed to receive their dues after the schemes ended.
According to the investigation, the case came to light following a complaint by 47-year-old Satheesh Kumar, a resident of Thirparappu in Kanniyakumari district. Satheesh Kumar had joined a ₹10-lakh auction chit operated by Paulraj under the name Divine Chit Funds at Kadayalumoodu on April 11, 2022. He subsequently paid a total of ₹8.83 lakh in several instalments.
After the chit period ended, Satheesh Kumar allegedly approached Paulraj seeking the return of the amount he had deposited. However, Paulraj allegedly continued to delay the payment. The complaint stated that he later absconded from the area along with his family.
The DCB registered a case on December 10, 2025, based on the complaint and began investigating the alleged financial irregularities. During the probe, investigators found that the matter was not limited to a single investor.
According to the police, Paulraj had allegedly operated similar chit schemes in the area and collected money from a large number of investors. More than 90 people were found to have allegedly suffered financial losses after their money was not returned at the end of the respective chit periods.
The total amount involved in the alleged fraud has been estimated at around ₹9 crore. Investigators are examining the claims of individual investors and the financial transactions associated with the chit schemes to establish the exact amount collected and the losses suffered by each investor.
Arrest in Chennai
As the investigation progressed, the DCB began tracing Paulraj. He was arrested in Chennai on Sunday following efforts to locate him. After his arrest, he was produced before a court, which remanded him in judicial custody.
The investigation is now focused on the money collected from investors, the number of chit schemes allegedly operated by Paulraj, the transactions linked to the schemes and the manner in which the collected funds were used.
Investigators are also examining financial records and information provided by investors to determine the extent of the alleged fraud. The authorities are likely to assess whether additional individuals were involved in operating the schemes or handling the money.
The DCB has appealed to people who invested money in the alleged chit fund schemes and did not receive their dues to come forward and lodge complaints. Officials believe additional complaints could emerge as more investors become aware of the investigation.
More complaints may emerge
The emergence of more than 90 alleged victims during an investigation that initially began with a single complaint indicates the possible scale of the financial irregularities, according to the investigators.
Chit fund schemes generally involve investors making regular instalment payments, with funds distributed according to the terms of the scheme and auction process. However, disputes can arise when operators fail to return the money after the completion of the agreed period.
In the Kanniyakumari case, investigators are examining the payment records, details of investors and documents connected with the alleged chit schemes. The authorities have urged anyone who invested in Paulraj’s schemes and did not receive their money to approach the DCB.
Further complaints could help investigators determine the actual number of affected investors and establish the total financial loss. The investigation is continuing, while Paulraj remains in judicial custody.
