A 57-year-old chit fund operator named 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 revealed that investors who had deposited money into his chit fund schemes allegedly never received their dues once the schemes concluded.
How the Case Came to Light
The case originated from a complaint filed by 47-year-old Satheesh Kumar, a resident of Thirparappu in Kanniyakumari district. Satheesh Kumar had joined a ₹10-lakh auction chit scheme run by Paulraj under the name Divine Chit Funds at Kadayalumoodu on April 11, 2022, and went on to pay a total of ₹8.83 lakh across several instalments.
Once the chit period ended, Satheesh Kumar allegedly approached Paulraj to get his deposited money back — but Paulraj kept delaying the payment. According to the complaint, he eventually absconded from the area with his family.
What Started as One Complaint Became Something Much Bigger
The DCB registered a case on December 10, 2025, based on Satheesh Kumar's complaint and began investigating what were initially believed to be isolated financial irregularities. But as the probe progressed, investigators quickly realised this wasn't a one-off issue.
Police found that Paulraj had allegedly been operating similar chit schemes across the area for a while, collecting money from a large number of investors. More than 90 people were eventually found to have suffered financial losses, with their deposits never returned at the end of their respective chit periods. The total amount involved in the alleged fraud is now estimated at around ₹9 crore.
To pin down exactly how much money was collected and how much each investor actually lost, investigators are carefully going through bookkeeping services in India-style scrutiny of individual investor claims and the financial transactions tied to each chit scheme — essentially reconstructing years of payment records to build an accurate, complete picture of the fraud.
The Arrest in Chennai
As the investigation progressed, the DCB tracked down Paulraj and arrested him in Chennai on Sunday. He was subsequently produced before a court, which remanded him to judicial custody.
The investigation is now focused on several key areas — how much money was collected in total, how many different chit schemes Paulraj allegedly operated, the transactions linked to each scheme, and exactly how the collected funds were used. Investigators are also examining financial records and information submitted by affected investors to understand the full scale of the alleged fraud, while also checking whether other individuals may have been involved in running the schemes or handling the money.
More Victims Expected to Come Forward
What's particularly striking here is how an investigation that started with a single complaint has already uncovered more than 90 alleged victims — a scale that investigators say hints at just how widespread the actual fraud might be.
Chit fund schemes typically work by having investors make regular instalment payments, with funds distributed based on the scheme's terms and its auction process. Disputes tend to arise when operators fail to return money once the agreed period is complete — which appears to be exactly what happened here, repeatedly, across multiple schemes.
The DCB has appealed to anyone who invested in Paulraj's chit fund schemes and never received their dues to come forward and file a complaint. Officials believe additional complaints are likely to surface as more affected investors become aware of the ongoing investigation. For now, the probe continues, with Paulraj remaining in judicial custody.
FAQs
Q1. How many investors were allegedly affected in the Kanniyakumari chit fund scam?
More than 90 investors have been identified as allegedly affected, with total losses estimated at around ₹9 crore.
Q2. How did the investigation into Paulraj's chit fund schemes begin?
The case began after a single complaint from investor Satheesh Kumar, who had paid ₹8.83 lakh into a ₹10-lakh auction chit scheme but never received his dues after the chit period ended.
Q3. What is the DCB asking other affected investors to do?
The District Crime Branch has appealed to anyone who invested in Paulraj's chit fund schemes and did not receive their dues to come forward and lodge a formal complaint.