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MphasiS BPO Scandal 2005 Overview

The document summarizes a 2005 scandal involving employees of the Indian BPO company Mphasis. Five Mphasis employees were able to access customer financial information and passwords from Citibank and stole around $425,000 from US customer accounts over four months. The fraud was eventually discovered when one customer complained to Citibank, leading to a police investigation that uncovered the scheme and resulted in 12 arrests. Key aspects of the case were that no hackers were involved, the perpetrators had no criminal history, and the incident highlighted the importance of individual responsibility in data security.

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Sayan Ghosh
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169 views6 pages

MphasiS BPO Scandal 2005 Overview

The document summarizes a 2005 scandal involving employees of the Indian BPO company Mphasis. Five Mphasis employees were able to access customer financial information and passwords from Citibank and stole around $425,000 from US customer accounts over four months. The fraud was eventually discovered when one customer complained to Citibank, leading to a police investigation that uncovered the scheme and resulted in 12 arrests. Key aspects of the case were that no hackers were involved, the perpetrators had no criminal history, and the incident highlighted the importance of individual responsibility in data security.

Uploaded by

Sayan Ghosh
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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MPHASIS

BPO
SCANDAL
S AYA N G H O S H
20BSP2174

This Photo by Unknown author is licensed under CC BY-SA.


B P O I N D U S T RY 

• In 2004-05 India contributed 44% ($17.2 billion) of the world


outsourcing market. The BPO industry in the country grew at the rate of
41% in 2004-05 to reach a value of Rs.25, 080 crores.
• The IT and ITES companies contributed about 4.1% of the countrys
GDP by 2004-05. Over 185 of the Fortune 500 companies were
outsourcing from India.
• 50 out of the 74 SEI CMM Level 5 certified companies in the world were
based out of India. But this success record of Indian BPO companies
was marred by a few scandals in 2005

This Photo by Unknown author is licensed under CC BY-SA.


THE SCANDLE

• In April 2005, some workers on the payrolls of MphasiS BFL Pune, garnered
Personal Identification Numbers (PIN) and net passwords from the U.S.
Citibank customers and drew money from their accounts.

• Five employees of MsourcE (the BPO arm of MphasiS BFL), unit supervisor
Maurelene Fernandes, Bijoy Alexander, and former customer care executives
Ivan Thomas, Siddhartha Mehta and Stephan Daniel are said to have
identified glaring loopholes in the MphasiS system, devised a  modus
operandi to siphon off funds, roped in friends like John Varghese, from
outside and executed the fraud over four months. They allegedly pulled off a
financial fraud worth nearly half-a-million dollars (US$425,000 at last count
on April 20). The victims were Citibank customers in the United States.

This Photo by Unknown author is licensed under CC BY-SA.


HOW IT CAME TO
LIGHT

• Neither Citibank nor MphasiS detected anything after the first illegal
transfer in November 2004. One of the account-holders seemingly
complained to Citibank, which alerted Citigroup Investigative Services
(CIS). CIS, the recipient banks and police’s cyber crime cell of Pune
together laid a trap. On 1 April 2005, Ivan and a co-accused, Shailesh
Bhulewar, came to check about a transfer in a Rupee Co-operative Bank
branch in Pune and promptly fell into the trap.

• The cyber crime, which could only have happened in a globalized world,
was believed to be the first of its kind to have come to light in India, and
lead initially to the arrest of 12 persons. Police investigation showed that
the money siphoned off could be more than Rs 15 million.
This Photo by Unknown author is licensed under CC BY-SA.
HIGHLIGHTS OF
THE CASE

• No computer geeks or hackers were involved in this fraud.  


• Second, none of the accused had any prior criminal backgrounds.
• They were not breaking through firewalls or decoding encrypted software.
• Kiran Karnik, President, NASSCOM, sums up the essence when he says
that no matter what systems are in place, data security depends upon the
individual.

This Photo by Unknown author is licensed under CC BY-SA.


THANK YOU

This Photo by Unknown author is licensed under CC BY-SA.

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