News Clippings

Busted: The online narcotics dealers

asia timesFeb 16, 2007

KOLKATA – First it was “phishing” to gather personal information to sell for profit. Then the world discovered that unscrupulous elements in India’s famed information technology industry were sweet-talking their American clients into parting with millions of dollars from their bank accounts or credit cards. Now, an Indian software company and its American counterpart are accused of peddling narcotics over the Internet to addicts all over the world.

Sleuths of the Indian Narcotics Control Bureau (NCB) came down hard early this week on Xponse Technologies, a Kolkata-based software development company and its two associate call center companies and arrested its founder and chief executive, Sanjay Kedia, on the charge of dealing and selling drugs over the Internet, primarily in the North American market.

Kedia was alleged to be a kingpin of an international Internet drug trafficking racket along with a US-based associate, Steven Mahana, who owns a 49% stake in Xponse. Kedia and Mahana, the bureau alleges, were involved in trafficking psychotropic substances, mainly phentermine, and are said to be also linked to a Colombian drug cartel.

Kedia, 31, an engineering-college graduate from one of the country’s prestigious Institutes of Technology, is alleged to have been running the racket for the past two years and earning about US$500,000 a month from his thousands of customers, mainly in the US, Canada and Sweden.

“We have come to know that Kedia had opened an account with a Luxembourg bank in a fictitious name and deposited $10 million,” said Sandeep Mittal, zonal director of the NCB. Besides, thousands of dollars were also found stashed in various local banks.

“The setup was ingenious and goes to prove that only a sharp mind of an educated person could carry it off,” said Mittal. It appears that the operators of the scheme not only understood the minds of the addicts, but also had done their homework.

According to a bureau statement, Kedia built a database of doctors in the US along with their registration numbers and the drugs they prescribed. Then he allegedly floated 29 online pharmacies (like,,,,, and sent out the names via mass emails.

The rest was easy. As addicts took the cue and logged on to the websites, they were led to Kedia’s call centers with a toll-free phone number. They were assured of complete privacy and quantity in bulk. The call center would receive the payment – much more than the cost of the drug – and fill out a prescription from the database, complete with a doctor’s forged signature, his registration number and the client’s details such as name, address, body weight and blood pressure.

This prescription and the money were then forwarded online to a pharmacy in the addict’s neighborhood for collection. The difference between the actual prices of the medicine was retained by the call center. “The whole process was carried out with such precision that even the pharmacies probably did not know that a racket was involved,” said bureau officials.

Kedia’s lawyer has denied his companies’ involvement. “Xponse and his associate companies were just involved in developing the software for the websites for a US-based firm with interests in pharmaceuticals,” said the lawyer, adding, “If that firm misused the software, Xponse and Kedia can’t be held responsible.”

But bureau officials said that the US-based firms were a “shadow entity” of Xponse, which was unearthed first by the US Drug Enforcement Agency (DEA) and brought to the notice of the Indian authorities.

The DEA started surveillance about a year ago following reports of some pharmacies in the US, Canada and Sweden supplying medicines regulated under the psychotropic drugs rules, in bulk quantities to buyers even outside these countries. It then traced these alleged dealings to the Kedia-owned companies Xponse Technologies, Xponse IT Services and Xponse Inc.

Although this is the first case of an established Indian IT company’s alleged involvement in the illegal drug trade, it is not the first time that India has been featured in illegal sales of pharmaceutical products over the Internet.

According to a United Nations Educational, Scientific and Cultural Organization report, deregulated and privatized markets have allowed the drug industry to spread its activities worldwide, opening new trafficking routes and production zones. Countries like India that are opening up their economies to global forces fast are also increasingly contributing to the globalization of the illegal drug trade.

In fact, the DEA says India’s inclusion in illegal Internet drug sales was first noticed in mid-2005 when the Organized Crime Drug Enforcement Task Force investigation under “Operation Cyber Chase”, cracked down on 20 rogue Internet pharmacies for conducting illegal sales of pharmaceutical products over the Internet. These companies were identified as being based in the US, Europe, the Caribbean and in Asia, including in Indian cities such as Delhi, Agra and Mumbai.

According to the DEA, the Internet has been an open medicine cabinet for too long with cyber drug dealers illegally doling out a vast array of narcotics, amphetamines and steroids. These e-traffickers target young people and those suffering from addiction and attempt to subvert the medical prescription system.

Even as the DEA continues to warn that illegal pharmaceuticals pose a great risk to the health and welfare of American buyers because these drugs are manufactured overseas in unregulated facilities, many online sellers continue to thrive on just “cheap sourcing”. Take the instance of Value Pharmaceuticals, an online pharmacy that promises “discount pharmaceutical purchases conveniently and confidentially online” and offers “reliable delivery globally”.

This seller, which provides a “1-800” (toll-free in North America) number and does not reveal its operation base, says that prices of medicines vary significantly from country to country. It researches these price differences and then, through its online overseas pharmacies, gives the buyer the ability to access these lower-priced markets and buy discounted brand-name drugs and generic drugs.

The seller also claims that brand-name products are sourced from well-developed Western countries with highly regarded drug regulatory systems as well as countries that have low-priced pharmaceutical markets.

“Most of the generic products available from Value Pharmaceuticals are sourced from Western European countries. A few of the generic products are sourced from approved pharmaceutical manufacturers from India and these are identified during the ordering process,” it says.

Shri Sandeep Mittal, an IPS Officer of 1995 Batch, completed B. Sc. (Honours) Geology with University Gold Medal and M.Sc. Applied Geology with University Gold Medal, both from University of Delhi. He earned Degree of Master’s in Police Management from Osmania University, Diploma in Cyber Security and Postgraduate Diploma in Cyber Crime Investigation and Cyber Forensics from Gujarat Forensic Science University, Gandhinagar . He is a Postgraduate in Cyber Defence and Information Assurance from Cranfield University, UK. He conducted a number of experiments in people friendly policing to bridge the divide between police and public. He headed the Security of Asia Pacific’s largest prison i.e. Tihar Prisons, New Delhi. While serving in Narcotics Control Bureau under Ministry of Home Affairs, Government of India as Zonal Director he was instrumental in liquidating a number of National and International drug syndicates and developed his skills in cyber crime investigation. He is a Chevening Cyber Security Fellow, UK; a Commonwealth Scholar in Internet Law & Policy a t University of Strathclyde, UK; an Associate of Institute of Defence Studies and Analyses, New Delhi and a Life Member of United Services Institution of India, New Delhi; Indian Society of Criminology, India and Indian Institute of Public Administration, New Delhi. He is member, Editorial Board of Indian Journal of Criminology and Criminalistics, a peer reviewed journal. He has published research papers in reputed peer reviewed Journals.

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