Monday, December 19, 2005

Something To Consider

Normally, I hate creating an entry about someone else's work, but this story from the New York Post really got me thinking about this whole "outsourcing" trend among American businesses. It's a little convoluted, but it does make a dramatic point.

SHELL OF A GUY

By CHRISTOPHER BYRON

IT'S bad enough when an American worker discovers that his job has been outsourced to some low-wage country in the Third World.
But when the outsourcing involves back-office data-processing jobs at banks and other financial institutions, a different and more menacing problem arises: What if lax security at these facilities opens the door to unstoppable identity theft and financial fraud from beyond our own borders?

An example of how that sort of thing can start occurred recently in the city of Gurgaon, India, where the subsidiary of a New Jersey data-processing company called Vanguard Info-Solutions was caught with confidential computer records stolen by two U.K. executives from the offices of a Vanguard rival.

In the U.S., Vanguard Info-Solutions could soon be drawn into even bigger problems. That's because of its close ties to a bankrupt outsourcing company called Allserve Systems Corp. and the man who has been pulling Allserve's strings from the start: an Indian businessman named Dinesh Dalmia.

Dalmia, 44, is wanted for questioning in India concerning his apparent involvement in a stock-rigging scheme that shook the Calcutta Stock Exchange at the turn of the decade. The Interpol Web site lists criminal conspiracy, forgery and fraud among the offenses about which the authorities want to question him.

The seeming ease with which Dalmia has managed to slide into the role of an outsourcing kingpin, behind corporate shells and front men in the U.S., should be a cautionary tale for everyone.

Leaving India one step ahead of the law, Dalmia set himself up in late 2003 in a palatial Fort Lee, N.J., estate overlooking the Hudson River. And from that perch he began knitting together a network of companies to cash in on the outsourcing boom that was erupting in India.

Vanguard Info-Solutions is part of that network. And so too is Allserve Systems Corp., as well as various other companies in the U.S. and Europe.

In the last year, Allserve raised more than $83 million in loans and credits from top U.S. companies like IBM, CIT Financial and Merrill Lynch. But the lenders never knew of Dalmia's presence in a thicket of offshore trusts that stretched from the Channel Islands off the U.K. coast to Tortola.

They didn't know, for example, of Dalmia's apparent ties to a company supplying leased computer equipment to Allserve.

Documents on file with New Jersey's Department of Revenue Services list the company, IGTL Solutions (USA) Inc., as sharing the same North Brunswick, N.J., office occupied by Allserve, and the documents also identify IGTL's president as Dalmia.

In late November, much of Dalmia's network suddenly collapsed in a heap, sending New Jersey-based Allserve into Newark federal court to file for bankruptcy.

In London, where Allserve's parent company collapsed as well, investigators from Britain's Serious Frauds Office got involved

That happened after court-appointed administrators began sifting through the contents of an official's desk and stumbled upon a stack of pre-printed letterhead stationery purporting to be from an IGTL office in Princeton.

But IGTL has no known office in Princeton. The stationery's address instead tied to a facility where business travelers can rent a room, a desk and a phone for brief periods while on the road.

One Allserve creditor in the U.S. says his company got suckered by the letterhead, and other lenders may have been, too.

Last week, federal prosecutors in Newark began issuing subpoenas to Allserve's creditors. Their goal: To get to the bottom of what happened here.

To date, about the only collateral that Allserve's creditors have been able to find consists of some crated computer equipment in a storage room in Trenton, N.J. The creditors say it's just a portion of what they've paid for, yet where the rest is no one knows.

The same fog seems to have enveloped an estimated $20 million lent by the creditors to a different but closely related group of Dalmia-linked companies with "B2B" in their names.

Take an outfit called B2B Solutions Inc., which is actually nothing more than the predecessor to Vanguard Info-Solutions Inc.

Documents from the New Jersey Department of Revenue Services show that B2B Solutions Inc. was created in 2000 by an Indian businessman from New Jersey named Dinesh Mittal.

Mittal said that in late autumn of 2003 he was approached by a group from Allserve that said it wanted to buy his company. A top insider at Allserve at the time said the talks were in fact handled directly by Dalmia.

By March 2004, Mittal had sold B2B Solutions to a Dalmia-linked offshore shell in the Channel Islands called Excalibur Investment Group. There waiting to be folded into B2B Solutions was a startup outsourcing business that Allserve's London operation had owned in Gurgaon, India.

The company, Vanguard Info-Solutions (India) Ltd., was apparently to merged with B2B Solutions. Yet it's hard to know for sure just what was afoot because the view of the proceedings is hampered by the Excalibur trust.

Be that as it may, in no time B2B Solutions' Web site blossomed with exciting news: The small-time New Jersey computer business had seemed to morph overnight into a multinational powerhouse with operations that stretched from Miami to the Punjab.

The grand vision was undoubtedly one reason why creditors proved willing to loan money to a company owned by people hiding out in the Channel Islands.

YET some creditors now say they felt the first tremors of un ease early this year when B2B Solutions abruptly changed its name to Vanguard Info-Solutions Inc. and launched a failed effort to merge with a Nasdaq Stock Market-listed computer company angling to get into the outsourcing game.

By the start of spring, the tremors had reached the Allserve creditors, too, as people the creditors had never met began delivering strange, dog-ate-my-homework excuses for having to miss upcoming loan payments. Oddest excuse of all: a sink hole had, in effect, swallowed up an Allserve facility in Chennai, India.

By autumn, the creditors had begun to wonder whether they themselves had stumbled into a sink hole, and they began hunting for answers from whoever seemed in charge.
But most had no idea who Mr. Big really was, and that alone enabled the crew in New Jersey to spin them in circles.

When a senior vice president for North Fork Bank, a major creditor to Allserve, showed up at the company's offices and asked to see the owner, no one would tell her who that person was or where to find him. All she was told was that her questions would all be answered by Nick.

Later, a lawyer for another creditor, the DB Zwirn investment group, had more luck. He learned that Nick's last name was Mittal. But the lawyer could rarely get Nick to respond and he wound up filing a complaining affidavit to that effect in court.

Only one creditor managed to break through to the real Nick Mittal (or so he thought). During a conference call of creditors last week, one person volunteered the news that he had actually met Nick Mittal personally and had even been to his house for dinner. Later, the lucky lender even recalled the address . . . a nice home indeed, he said, describing it as being in Fort Lee, N.J., on a street called Euclid Drive.

He was in fact describing the home of Dinesh Dalmia himself.

Next development: a bankruptcy hearing this week in Newark federal court, where an Allserve official is said to be making an appearance. Stay tuned.

17 comments:

  1. this is a scary article for sure.

    ReplyDelete
  2. Nikki8:18 PM

    ::shakes head::

    Personally, I think humanity on the whole is making a slow and steady decent to H*ll in one great big hand basket.

    Merry Christmas, by the way. :-)

    ReplyDelete
  3. Anonymous8:47 AM

    Dinesh and his whole India team is a big group of scamsters. They have cheated millions of dollars in India as well. I am surprised how come he has not been arrested so far. Let me tell that Dinesh Dalmiya has been visting India and its facilities in India regularly almost every six month despite red corner notices. This puts a big question mark on all of them who claim to be custodian of law. I am equally surprised howcome this man and his team in India like Rajesh Gupta, Country Head Allserve India (Now, known as Van guard) are not arrested. Rajesh Gupta is working on Dinesh Dalmiya's behalf in India. Even Rajesh has visited US mutlitple time in recent past. These guys must be put on their right place to stop further damage to the name called INDIA.

    ReplyDelete
  4. Anonymous11:42 PM

    Everyone spoke about everytging- so what happend to the VANGUARD EMPLOYEES?? did any one even bother to ask? Well they were all asked to leave. Only a hndful are left to be thrown out later in good time. Its sad that so many people lostthier jobs cz Dalmias messed up !! Not fair. The press ads on the fuel by spreading more rumours in the BPO industry that it getd tough for us to get jobs around here. Only if everyone could back off & let everyone live in peace & stop gossiping & help usget JOBS

    ReplyDelete
  5. Anonymous6:58 AM

    Hello Rajesh

    ReplyDelete
  6. Anonymous8:04 AM

    Ok, its over. So EVERYONE BACK OFF


    No more gossip

    ReplyDelete
  7. Anonymous3:30 PM

    Will someone tell me the name of other companies which are running under the influence of Mr Dalmia and group.. in India ...

    ReplyDelete
  8. Anonymous5:56 AM

    Nick Mittal = Nikunj Mittal = Dinesh Dalmia's Beloved Nephew.

    ReplyDelete
  9. Disgruntled employee of NVCL.6:15 PM

    Another one company linked to Dalmia is Netvision Cybertech (P) Ltd (NCPL or NVCL). DD (Dinesh Dalmia) seems to like to messing around with peoples money & lives.

    ReplyDelete
  10. Anonymous5:09 AM

    Net Vision Cybertech Ltd (LESUWKSEBD)
    204 North Center Drive
    North Brunswick, NJ 08902
    US
    & in Chennai, India, too.

    ReplyDelete
  11. Anonymous5:16 AM

    See this too
    Allserve Systems PLC
    Techonology Transfer Centre
    Ascot, Berkshire SL5 7PW
    UK

    ReplyDelete
  12. one please update me on the status of the investigations against Dinesh Dalmia in the USA. I am a journalist from India working on a comprehensive report on him.

    Aditi Roy Ghatak

    ReplyDelete
  13. Anonymous12:01 PM

    I believe that the CEO of Allserve Systems UK was Pradeep Mathur. He was reported as having "drowned" in Dubai the day before the company was raided.

    There was a very dodgy character at NTL who was a close colleague of Pradeep and left that company under very suspicious circumstances. Was he the real Rajesh Gupta ?

    He surfaced shortly later with another business failure under the name of Applicahome.

    yours

    Batman

    ReplyDelete
  14. Hi Nice Blog.A Document Scanning Services and Document Imaging Services provider focused on value pricing and quality deliverables with quick project turnarounds, utilizing dDSpeedScan© to provide best-practice project deliverables.document scanning

    ReplyDelete
  15. This comment has been removed by the author.

    ReplyDelete
  16. I like the approach you took with this topic. It is not every day that you find a subject so to the point and enlightening.

    ReplyDelete

I love comments. I won't lie about that!