The trader of shadow fortunes

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Everyone knows about the illegal lottery business. Few know who runs it. Shantanu Guha Ray uncovers Santiago Martin

Illustrations: Samia Singh

EVERY FEW nights, as a nation dreams, contract employees of Kolkata-based courier companies heave brown bags onto nondescript railway station platforms across Tamil Nadu, Andhra Pradesh and Karnataka. These jute sacks hold no prosaic cargo, but literally millions of lottery tickets worth hundreds of crores, each ticket a sultry — and illicit — promise of riches. Troops of young boys swarm onto these sacks; dividing their contents among themselves, they cycle off into the approaching dawn. That day — and every day — lottery tickets worth Rs 40 crore will be sold across India. Lotteries are legal in just 12 states and five Union territories; in the other states, tickets are clandestinely sold at nondescript tea stalls, cigarette shops and newspaper vends. Illegal lottery tickets account for a whopping 60 per cent — Rs 7,200 crore — of the Rs 13,000 crore gambled every year on lottery tickets.

Presiding over this illegal empire of eternal hope and callous numbers is Santiago Martin, 42, a Myanmarese whose interest in paper lotteries are perhaps as old as he is. The day Martin was born, his Yangon-based parents won a super lottery, getting $1,000. “He proved lucky for his parents,” says T Arumayagam, who worked with Martin in Arunachal Pradesh where lotteries are legal, before he shifted to Coimbatore.

“He is a modern-day Robin Hood. In just three states where lotteries are banned (Tamil Nadu, Andhra Pradesh and Karnataka), he employs over 2,000 people,” adds Arumayagam, now the owner of a Chennai tea stall often used as a base by Martin’s boys to sell tickets. But isn’t this illegal? “They do it nearby, not inside my shop,” he counters, assuming he is safe. Also assumed to be safe is Martin’s Rs 7,200 crore paper lottery racket. Ironically, insiders believe that illegal paper lotteries are an easier business to run than legitimate paper lotteries.

Top officials of the Financial Intelligence Unit (FIU) of the Enforcement Directorate (ED) confirm that these funds are routed through hawala transactions to tax-free havens for “honest investments”. Once worth a “mere” Rs 300 crores a year, the illegal paper lottery business has grown as, paradoxically, more and more states have banned them. In a cruel twist, the lottery king has, according to FIU officers, started to siphon off a portion of the prize money awarded every week. Instead of getting the 75 per cent of the prize that winners are entitled to, they get about 55 per cent. Since Martin’s millions are backed up by an effective mafia, no winner complains. Earnings have increased to such an extent that cash-rich Martin has started acquiring apartments in cashstarved Dubai. Sources reveal that he has plans to acquire a US passport — some confidants have already picked up jobs as nurses in the US so as to prepare a safe route for the kingpin to emigrate.

No one claims to have seen the reclusive Martin, though he was reportedly once photographed as he bobbed around in a golf cart on a course in Chennai. He was then accompanied by his assistant Suresh, who takes delivery of Martin’s monies.

Martin made his first fortune from illegal two-digit lotteries in Yangon, a scheme — or rather, scam — in which punters wager small sums on two numbers of their choice, lured by the small chance that they may win a modest sum and by the microscopic possibility that they may strike it big. Martin and his brothers worked as agents selling lottery tickets across Yangon and other parts of Myanmar. In the 1980s, Martin and his family left Myanmar because illegal lotteries had become a very sensitive political issue there, and moved permanently to India, starting operations from Arunachal Pradesh. Networking heavily with low and mid-level police and income-tax officers, he slowly but steadily found his moorings across the seven Northeastern states where all lotteries are legal, as they are in Punjab, Kerala, Sikkim and Maharashtra.

If Martin’s firm were to enter the retail business, he would be able to gain both respectability and a perfect cover

For reasons unknown, Martin then shifted to Coimbatore and, according to Tamil Nadu police, worked closely with his brother-in-law and trusted aide, John Britto. Various hawala routes for international investments were opened up for Martin by Britto and money transfers started, police officials say. And while the illegal trade continued Martin, in an apparent attempt to gain respectability and a public profile, started mingling with political parties in Tamil Nadu and neighbouring states.

Hidden route Tickets printed all over India are sent by train to states where lottery is banned and then carried on bicycles for illegal sales
Hidden route Tickets printed all over India are sent by train to states where lottery is banned and then carried on bicycles for illegal sales

But a Rs 2 crore donation to Deshabhimani, the CPM newspaper backfired after a rival newspaper revealed the source of the funds in 2005. Thereafter, Martin kept a low profile, virtually going into hiding. Prior to this, Martin had acquired SS Music, a popular music television channel in south India, but the move boomeranged when newspapers reported that he was grilled by CID sleuths and the Chennai crime branch in connection with his illegal sale of lottery tickets in Tamil Nadu. In fact, Martin and his associates had confessed to the charges, says a FIR placed in the Chennai High Court. The court, in turn, asked the Chennai police to take action against Martin and his accomplices. Why no action was taken is anyone’s guess. Martin, who — after a few unsuccessful attempts — obtained a Rs 25 lakh bail from Madras High Court, stepped up his efforts to gain entry into the upper echelons of various political parties. Last December, he visited Chennai to attend a meeting convened by the ruling DMK, which wanted him to be in the reception committee of World Tamil Conference scheduled for August. “It was one more attempt to gain acceptance among the political circles in the south,” a top DMK source told TEHELKA, adding: “Martin also has a direct connect with an influential Congress leader based in the national capital.” Interestingly, Martin is also a key player in the All India Federation of Lottery Trade and Allied Industry, which is a member of the Federation of Indian Chambers of Commerce and Industry (FICCI). Many say it’s his way of acquiring the kind of clout that often comes in handy during crises.

BUT MARTIN’S lawyer, Sri Ramalu, maintains his client is a philanthropist and is innocent, only selling lottery tickets to agents of other states. With no specifics forthcoming, Ramalu says Martin is completely legit.

‘No one complains formally because of the fear of martin and his men,’ says Anuj Sharma, a top cop from west Bengal

However, investigators across India disagree. The way this gravy train operates is mind-boggling. In Itanagar, his operations run under the name of Biyani Traders, prompting many to joke that if Martin were to enter the retail business he would eclipse the better-known Biyani — retail mogul Kishore Biyani (the man behind Big Bazaar, Pantaloon and MegaMart). This would help him gain both respectability and a perfect cover for his illegal trade.

Big bucks game an agent stamps lottery tickets before their sale in a Kolkata store
Big bucks game an agent stamps lottery tickets before their sale in a Kolkata store
Photos: Pintu Pradhan

Biyani Traders has a licence to print tickets — strictly for states where lotteries are legal. The racket starts from there. Top police officials say that Biyani Traders prints tickets illegally all over the country under this cover. Tickets are printed in Hyderabad (Srinidhi Security Printers and KL Hi Tech Secure Printers), the firecracker town of Sivakasi (Mahalakshmi Printers), Bengaluru (Sai Security Printers), Chennai (Vairam Printers) and Delhi (Sai Security Printers and New Tech Printers). The tickets are then couriered to Kolkata — Bengal allows paper lotteries —but only a fraction of the consignment is then passed to official, legal, agents. The majority are dispatched to states where the game is illegal. “It is a huge, untraceable track. The tickets — we have the records — are sent to fictitious people with false addresses,” says Ashok K Singh, a top Crime Branch official in New Delhi, adding: “He was the largest seller of tickets when lotteries were legal in both Tamil Nadu and Karnataka, but once they were banned, he started operating illegally.”

When sold illegally, lottery tickets fetch premium prices. Tickets worth Rs 1, 2, 10 or 25 are sold to punters for up to 10 or 15 times the face value. On top of that, winners often get just a fraction of the promised sum. “Yet, people buy tickets because they think they’ll get a big win and then their troubles will be over,” says R Ashokan, who runs self-help groups for those affected by illegal lotteries in Karnataka. “Martin and his men, in collaboration with state officials and the police, usually dupe the winners.”

The craze for lottery money, or “luck cash” as many call it in India, is huge in the states where it is banned. In West Bengal, where Martin runs some of his strongest syndicates, the police have been zeroing in on him of late. Last week, the income tax and ED officials conducted raids on his offices across the state. “We are not in a position to offer details,” a senior IT official in Kolkata told TEHELKA.

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THE BIG, HIDDEN GAME

Sales in banned states: Rs 2-5 crore (estimates of FIU)

People involved: 2,000

Cases filed against Martin: 6

Chargesheets submitted: 2

Total illegal sales per year: Rs 7,200 crore; 60 percent of Rs 13,000 crore paper lottery business

Martin’s Rs 2 crore donation to a CPM newspaper misfired after rivals reported the donation

Martin is in a committee that will organise the World Tamil Congress in Chennai in August 2010

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Interestingly, though Martin could not be traced thereafter and was rumoured to have made his escape through Siliguri to neighbouring Bhutan, West Bengal CID officials confirm his clandestine visit in 2008 to Kolkata to watch an IPL match at Eden Gardens. “He has an official, legal face: being the agent of various lottery companies and often uses it as the perfect cover,” says a senior CID official, requesting anonymity. The officer further said that details of his unsold tickets are routinely recorded on Martin’s website, www.btlot.com.

FIU officials told TEHELKA that Martin sells around 1.45 crore lottery tickets every day. He is the sole distributor for 28 Sikkim lotteries, 17 Tamil Nadu lotteries and six Arunachal lotteries. He is a very active participant in the lotteries of West Bengal and the Northeast. Recently, Bhutan selected Martin Lottery Agency Limited as a sub-distributor in India for its bumper lotteries.

Acting on petitions from various state governments against the illegal sale of tickets, the Supreme Court — in recent times — asked the West Bengal government to maintain constant vigil over the movement of paper lottery tickets from printing presses across the country to states where the game is legal. The court also wanted all states where lottery is legal to keep accounts of unsold tickets.

Indian paper lottery rules stipulate that no prize money will be valid on the unsold tickets and that agents must refund unsold tickets before each draw. But for some reason or the other, tickets are never returned and, invariably, the winning number always comes from unsold tickets controlled by Martin and his associates. “Almost every day we get a large number of complaints from the general public about such tickets winning the prize. There have been cases of duplicate tickets as well: when winners turn up to collect the prize, they find it has already been picked up,” says Anuj Sharma, Special Inspector General and DIG of the CID, West Bengal. Sharma says often his department gets information of winners not getting the promised money. “But no one complains formally because of the fear of Martin and his men.”

Martin is sure to retain his throne until the lottery prohibition bill is invoked in parliament, says the BJP’s Vijay Goel

Troubled by Martin’s strong network among the police across India and powerful political connections, West Bengal Finance Minister Ashim Dasgupta recently made a presentation to the state cabinet on how state-run lotteries were losing huge revenue because of such rackets. “In fact, we have asked them for a detailed report from the State’s Vigilance Commission. This is a terrible economic crime happening in front of us and it needs to be tackled,” Dasgupta said. He should know. Routine charges continue to plague lotteries and raffles — other than those run by state government — across India. Last year, the Arunachal Pradesh government, and its chief minister Gegong Apang in particular, came under fire following allegations of manipulation in the draw of lottery winners on Independence Day, leading to violence and strikes in the state.

Past master Assam MP Mani Kumar Subba has been named in several lottery scams
Past master Assam MP Mani Kumar Subba has been named in several lottery scams

But who will bell the cat? On paper, there is ample evidence directly against Martin, encompassing countless charges of manipulation and illegal sale of lottery tickets (61 cases) tax evasion and hawala trading — and yet Martin remains unscathed. His connections with Mani Kumar Subba, the powerful Congress MP from Assam and a lottery kingpin, are well-known, though Martin’s associates claim he is miles ahead of Subba in the business. Interestingly, intelligence sources have found the two have a similar modus operandi. Subba’s firm, MS Associates, was charged by the Comptroller and Auditor General of India for being involved in the Rs 25,000-crore Meghalaya lottery scam and for major irregularities in Nagaland lotteries where winnings worth Rs 5,000 crore were siphoned off, never to reach the winners. “Martin operates in a similar fashion. And unlike Subba, he operates all over India,” Sharma says.

BUT THE police elsewhere are picking up traces of his activities. Last month in Punjab, the Crime Investigation Agency (CIA) of Chandigarh raided two shops selling unauthorized lottery tickets instead of Punjab state lottery tickets, tracing them to addresses in West Bengal. “They were issuing illegal tickets,” SSP Mohali Gurpreet Singh Bhullar said, adding that the booming sale of illegal lottery tickets was causing losses worth several lakhs to the state exchequer every month. “Once raids were conducted, the sale of legal lotteries went up from Rs 8.9 crore per month in 2008 to over Rs 23 crore per month in 2009,” Bhullar told The Tribune newspaper.

BJP general secretary Vijay Goel, who was instrumental in banning single-digit lotteries in Delhi, agrees. “The Congress justified lotteries because of their tax earnings. They are now banned but the illegal sale of tickets is on a high across India,” Goel says. He feels the only way to counter this is to invoke the Lottery Prohibition Bill in Parliament.

Until that happens, Martin will retain the throne.

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