Jaipur Police have arrested Pawan Chandak, a resident of Mathoda village in Rajasthan's Jodhpur district, for cheating textile traders and financial institutions in a ₹8.3 crore textile fraud. Chandak was arrested right after he arrived in India from Dubai, where he had travelled after committing the fraud.
According to police, the case was registered at Muhana Police Station on 28th March 2026 after a Jaipur textile trader filed a complaint. Chandak was alleged to be an exporter and purchased textile goods through two business entities and defaulted on payments after receiving merchandise worth crores of rupees.
Investigators said the alleged fraud started in April 2024 when Chandak began to take relatively small textile orders and made timely payments. At this time, suppliers were able to build trust and credibility and hence were able to accept larger consignments on credit. The accused, after gaining traders’ confidence, then bought textile goods worth ₹8.3 crore from the complainant and then abruptly cut off contact with them and left the country.
Police believe the fraud was done through a sophisticated business plan. Members of the syndicate set up multiple shell companies, registered commercial firms, and rented office space to appear to be working for the business, investigators say. The network financed initial purchases through friends, and suppliers believed that payments were being made regularly in time to build confidence. After getting the larger credit limits the syndicate is believed to have bought large quantities of textile products, sold them off to friends, and sent the main accused abroad to avoid arrest.
As a result, the fraud is believed to extend beyond one complaint. Recent investigations reveal that some textile traders in Jaipur may have been targeted by the same modus operandi, with losses ranging from ₹15 crore to ₹20 crore. These claims are being tested and more complaints may be found on the same network.
The investigation has also expanded to include alleged banking irregularities. The accused and his colleagues are being probed by police for business and cash-credit loans from at least seven banks before leaving India. Those who got the loans are investigating if fake financial documents, fake business credentials, or shell companies were deployed to secure them.
Investigators said after Chandak left for Dubai, the allegedly diverted textile goods were sold in the domestic market by his wife and others. Police are tracing the movement of these consignments and investigating whether businesses or individuals bought or handled the merchandise. They are also analyzing financial records to see how the money was distributed and if the shell firms are still laundering the money, they said.
The accused was found after long-term technical surveillance, and the investigators found that he had traveled overseas, Jaipur Police said today. Based on intelligence inputs on his return to India, a police team was on hand to intercept him immediately upon his arrival and arrest him. Chandak is now being questioned about the diverted textile consignments, financial transactions, and the identity of other people who may have been involved.
Custodial interrogation could give more insight into the syndicate’s structure, how it functions, the role of financiers, business associates, and other beneficiaries, officials said. Other states are also investigating if the frauds were done that way.
Financial crime experts say that commercial fraud has become increasingly sophisticated in recent years. Many such operations rely on shell companies, temporary business premises, fake corporate identities, and carefully maintained payment histories to gain the trust of suppliers and financial institutions. Once credibility is established, fraudsters often receive much larger quantities of goods or loans and can’t be recovered in time, and money markets are susceptible to the fraudsters.
Businesses need to do extensive due diligence before they can offer huge credit to a new customer and must also make sure they are doing so to avoid becoming the target of fraud and fraudsters by signing up for their own credit.
Company records, financial statements, banking credentials, GST records, and business references can be used to protect them from being exposed to big commercial fraud. It should also be followed up regularly on outstanding credit exposure and the trading partners.
Pawan Chandak’s arrest was a watershed event in the investigation, but authorities say the investigation could also reveal a much larger financial fraud network operating across state lines. Police will continue to follow the money trail, analyze banking transactions, and look for other suspects as they get more involved in the investigation, and others are expected to be arrested in the future.
The investigation is still ongoing, and authorities are asking any other traders who may have been involved to come forward with information.
Comments
Please to leave a comment on this article.