‘Gold-plated’ lies: How Karnataka gang cheated banks of Rs 27 lakh for over a year

3 min readBengaluruJul 13, 2026 08:52 PM IST

The police said the gang targeted banks that conducted only acid tests on pledged jewellery. (File Photo)

The Karnataka police have cracked a large-scale fraud network that duped nationalised banks and various cooperative societies by pledging fake gold ornaments to secure loans worth lakhs of rupees.

The Shivamogga police said on Sunday that they arrested B J Lokesh, 39, and H Sudha, 35, both residents of Shivamogga district, in connection with the fraud. The police have also launched a manhunt for S Y Ravishankar, a gold appraiser at Punjab National Bank; Rahul, 26; and Sharath, 35, who runs a jewellery store.

Shivamogga Superintendent of Police Nikhil B said that it was a larger network and that the accused made Rs 27-28 lakh by pledging fake gold ornaments.

Nikhil said that a complaint was filed by a manager of Punjab National Bank alleging that some people pledged gold ornaments and took loans. But a thorough check during an auction revealed that the ornaments just had a gold coating of 10 per cent.

“Banks usually do an acid test in which they don’t get clarity about the amount of gold involved. It was discovered later when a machine test was conducted,” he added.

The police found that the accused had similarly pledged gold in other cooperative and nationalised banks.

According to a police officer, Rahul and Lokesh targeted banks that conducted only acid tests. To make the ornaments appear authentic at first glance, the fraudsters even had fake “hallmark” stamps affixed to them — ensuring bank staff and appraisers had no reason for suspicion, allowing loans to be sanctioned smoothly.

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“It has been quietly running for more than a year and has an inter-state link too. Sharath reportedly flew in fake gold-coated ornaments from Chandigarh but never approached the banks directly. He used Rahul and Lokesh to pledge the gold,” the officer said.

Rs 27-28 lakh loans on 419 grams of ‘gold’

The Doddapete police have registered the case. Nikhil said the police could seize ornaments weighing 419 grams, which were pledged for loans of Rs 27-28 lakh. The accused never repaid the loan. The banks realised they were cheated only when the gold ornaments were put up for auction and the tests were done using machines, he added.

“The banks need to test the gold to prevent such frauds in future. The appraisers must use the best possible way to check the genuineness of the gold,” Nikhil added.