Arjun’s 11: High-end car deals that led to a downfall

MUMBAI: The last post on the Instagram page of Scuderia Automotive Private Limited, a Navi Mumbai-based car dealership read, “GLA35 AMG delivered! Congratulations to the owner,” accompanied by a set of images of the mountain grey vehicle. Third in the Mercedes AMG model, the ex-showroom price of an automatic in this series starts at Rs 59.40 lakh. The pictures were posted on December 8, 2021. A day later, the 23-year-old owner of the dealership, Arjun Raj Iyer was arrested for cheating a customer of several lakh rupees.

Over the next few months, 10 more cases were registered against the Navi Mumbai resident in Mumbai, Pune, Ratnagiri and Nagpur. The investigating teams pieced together the scheme that Iyer allegedly masterminded to earn lakhs from unsuspecting car buyers, which included industrialists, local politicians like corporators as well as legislators, businessmen, sportsmen, actors and even other pre-owned car dealers across the country. He reeled them in by promising high-end vehicles with heavy discounts, including a Mercedes Maybach (ex-showroom price Rs 2.10 crore) for Rs 1.65 crore.

“He was in the interrogation room and one of his victims, a car dealer, was recording his statement in another room. He said that Arjun was among the top dealers of Mumbai. Initially, I thought he was exaggerating, but when he shared the details of Arjun’s operations, I realized that the young man was a master cheat. He aspired to become one of the top car dealers of the country through his unique model of offering heavy discounts, but his methods were fraudulent and landed him behind bars,” said assistant inspector Devidas Padalwar of the Azad Maidan police station.

Iyer was in the custody of the Azad Maidan station for 10 days after three criminal cases were registered against him in February. The month before that he was in the custody of the Pune police. The Navi Mumbai police have filed three charge sheets against Iyer, who is facing charges of criminal breach of trust, cheating, and forgery. If convicted, his punishment may range from 10 years to life imprisonment. An employee of a Thane-based Mercedes showroom, and some other sales agents have also been named as accused. At present, Iyer is lodged in Taloja jail.

“I had a target of selling 120150 premium range cars and since 2019, I have sold 75 cars,” Iyer’s statement to the Navi Mumbai police read.

Investigators said the cost of these cars totals Rs 55 crore, of which Iyer reportedly offered a discount of Rs 20 crore.

Sameer D Hatle, the advocate appearing for Iyer in all 11 matters said that the delay in delivery did not amount to cheating and that “the allegations in all FIRS are stereotypical in nature”. “The police department being aware of the fact that the cars are booked in the names of the complainants and Mr Arjun Raj has made part payment against the car value, still the offences were registered. Taking into consideration the circumstances and intricacy of law, delay in delivery of the cars cannot amount to cheating. It was merely a contractual obligation,” he said.

Honest beginnings

Around 5.8-ft tall, Iyer weighs around 73 kg and looks lanky, but fit. A stubble beard makes him look older than 23. His family hails from Kottayam, a town in Kollam district in Kerala, but lives in a rented apartment in Kalamboli. Arjun’s father, Rajesh, is a medical practitioner of naturopathy and runs a houseboat business in Kerala. Although Iyer studied only up to class 12, his childhood craze for high-end sports cars led him to choose the career of being a Direct Sales Agent (DSA) for car dealers around the country.

In 2019, Iyer would browse through OLX, a classifieds portal and take down details of preowned cars that caught his interest — typically, luxury cars like the Mercedes — and then meet the owner. He would offer to sell the car for a good deal, and take fresh pictures from different angles. Then he’d post a new advertisement on the site, but the price would be higher, because it would include a commission.

Strictly above board, Iyer’s business journey as a master salesman had begun. On September 5, 2020, he opened his own agency, Scuderia, to sell new cars. He also rented a workshop in Nerul where pre-owned cars would undergo customisation and refurbishment. He visited car showrooms in the state as well as in Rajasthan, Delhi and other parts of the country, and offered to work for them as a Direct Sales Agent. Suave, welldressed, friendly, and soft-spoken, his understanding of the luxury car business was spot-on, and it wasn’t difficult for him to build a rapport with the salespersons of showrooms who saw in him the potential to bring in business.

“Brand new Fortuner 4x4 delivered, Congratulations to the customer. Contact us for best deals. We deliver cars nationwide. @scuderia.ltd,” the first Instagram post, dated September 8, 2020, stated. A man in a blue tee shirt was gifting the key of the Toyota Sports Utility Vehicle (SUV) to a customer in Panjim, Goa.

The Fortuner, a diesel variant of Toyota, has an ex-showroom price of Rs 44.63 lakh in Mumbai. But, Iyer’s repertoire would soon include cars worth crores and sold at a discount of several lakhs.

A Ponzi scheme

Senior inspector NB Kolhatkar of Navi Mumbai Crime branch, led the first team that arrested Iyer from a five-star hotel in Andheri (west) on December 9, 2021. Kolhatkar and his investigation team interrogated Iyer for over 30-days in five criminal cases. According to him, Iyer’s plan was a “rob Peter to pay Paul” sort of Ponzi scheme.

“Let’s say, customer A approached Arjun to buy a luxury car worth Rs 1 crore, which Arjun offered to sell for Rs 75 lakh. A would pay Arjun an advance amount, say Rs 25 lakh, part of which Arjun would deposit with the authorized dealer as a booking amount. Similarly, other customers B, C and D would pay advance money to Arjun which he would deposit in his company bank account. However, most highend cars take months to be delivered. And this would help Arjun buy some time.”

According to Kolhatkar, these deliveries were only made after customers began to put pressure on Iyer.

“If any of the four customers, let’s say, A, who had paid Rs 75 lakh to Arjun to buy a Rs one crore car, started pressurizing for its delivery and threatened to go to the police, then Iyer would arrange for the rest of the Rs 25 lakh from the money he had received his others customers. He’d make full payment to the authorized dealer and get the vehicle delivered to A. Once customer A got his car, he had no complaint to make against Arjun.”

The discount was covered by the money he took from other customers. “He was basically rolling the money and using one customer’s money to give a discount to another,” the investigator added.

The pandemic worked in Iyer’s favour too. A post from a little over a year ago read: “Due to lockdown, delivery will continue after May 1. Sorry for the inconvenience.”

“Mr Arjun Raj was engaged in the selling of imported luxury brand cars since the last two years and the shortage of semiconductors have resulted in the late delivery of cars, due to pandemic situation,” Hatle, Iyer’s lawyer said.

Iyer delivered on his promises, initially. Once again, we turn to the social media page of Scuderia which is filled with photos and reels of people unveiling their new cars with families in tow — from sari-clad women with grand-children to women in niqabs with their sons —breaking coconuts and cutting cakes before taking possession of their new vehicle. A post shows a Maybach S560 “getting customized before delivery”, another shows a Jaguar being picked up from a Chennai dealership and being put into a freight truck.

As a result, many who bought cars from Iyer in the start of his business got their high-end luxury cars at the discounts he promised. The complainants are the last few dozen people who paid him the money he asked but didn’t receive the car they were promised. “Arjun has no money left in his bank account,” another officer in the investigation team said.

By the end of December 2021, several customers began to call Iyer enquiring about deliveries. Already in August, the first of the complaints was registered, and Navi Mumbai police began to track Iyer. On the 9th, they zeroed in on his location after tracing one of his phones.

“He was hiding in a five-star hotel in Andheri. The room was booked under another name,” Kolhatkar said.

The first complaint

Iyer used social media account to great advantage. He posted photos of high-end luxury cars — Mercedes, Range Rovers, Jaguars — available at “best deals”. When people would get in touch with him for more information, he would tell them that his company, Scuderia Ltd, offered discounts ranging from Rs 5 lakh to Rs 50 lakh on the original ex-showroom price. He’d then suggest a meeting. Iyer often drove a luxury car to such meetings, including a Porsche that belonged to the Andheri fivestar hotel.

Dr Atul Ingale, a nephrologist based in Vashi, first met Iyer through a car dealer who was also in the process of buying a car from him. Iyer offered to exchange the 56-year-old doctor’s Audi R8 for a BMW M2 (market price of Rs 1.15 crore) for Rs 65 lakh. He was “young, energetic, soft spoken, wellmannered, and sophisticated,” Ingale recalled, and agreed to the deal.

“I was impressed by the heavy discount and I agreed since I loved sports cars and I wanted to have one in my budget. He immediately sold my car for Rs 40 lakh without my knowledge and used my signature to transfer the ownership of my car,” Ingale said.

The doctor claimed that he was cheated of Rs 60 lakh, and was the first person to approach the police last August. “After taking an advance amount for the new car, he told me that he had given a token amount to an authorised car dealer in Goa to book my BMW M2. Then he started making excuses about delays in its delivery. Soon, he stopped taking my calls. After some months I discovered that he had not made any payment to the Goa showroom and the cheque of Rs 25 lakh that he gave to the showroom as a booking amount, bounced due insufficient funds. That’s when I understood he was a conman and filed a police complaint.”

“I trusted him because he had successfully delivered five or six cars with high discounts to some buyers. The car dealer who introduced me to him was also one of his victims,” Ingale said.

Iyer needed to ensure a few things: One, the car buyer doesn’t contact the authorised dealer. Given that he was offering high discounts, most customers agreed to conduct their business only with him. During any new purchase, a customer needs to register the vehicle by sending documents to the authorised car dealer. Iyer would reportedly create an email address that would look similar to the name of the dealer, and ask the customer to send the documents to it. However, he would only share the documents with the dealer if he was actually picking up a car from them, investigators said.

Two, he needed his customers to believe him, so Iyer reportedly sent false invoices of authorised car dealers to customers when they paid him the amount for the car. The police suspect that at least in one case, where the customer sent the money to the authorised dealer, Iyer forged a No Objection Certificate (Nocs) in the customer’s name and conspired with an employee of the dealership to transfer some of the customer’s payment into his account. The police are still checking the involvement of the employee.

“He was chasing his dreams sitting in a car that had wheels of fraud. It eventually led him to prison,” Kolhatkar said.