According to police, the gang of 10 would call up people in Mumbai, offer them loans, and then ask them to deposit the 'processing fees' and other taxes.
Unsurprisingly, people never received the loan.
Three persons have now been arrested.
A PhD student, cheated of over Rs. 90,000, approached police
The racket came to light when Suraj Muke, a PhD student of Matunga's Institute of Chemical Technology, approached police.
Muke had received a call from a 'multinational bank' offering him a loan.
He was asked to send his personal documents on firstname.lastname@example.org, plus "processing fees, documentation charges, fixed deposit of 5%, 8% on GST, and some cash," said Senior Police Inspector BM Kakad, Matunga.
Matunga police reached Delhi, Noida, Ghaziabad in search of frauds
Muke approached police after he had deposited money five times. He was cheated of Rs. 91,500.
Police then analyzed the phone-numbers Muke had received calls from, and the account number where he had been asked to deposit the money; the latter was traced to Vasundhara in Ghaziabad.
Matunga police, who visited Delhi and Noida too during the course of the investigation, eventually reached Ghaziabad.
Police laid a trap and waited for 8 days
In Vasundhara, they "laid a trap at an ATM," explained Maruti Shelke, Sub-inspector, Matunga. Then they waited.
"On the eighth day, one of the accused, Shamkant Sharma, 22, came to withdraw cash."
They nabbed Shamkant, who led them to his co-conspirators Vivek Sharma and Ashukumar Singh. All three were arrested.
Police also seized cellphones, laptops, debit cards, hard disks and routers from their flat.