Kanniyakumari District Crime Branch (DCB) police have arrested a man, N. Paulraj, 57, of Kadayal, for allegedly defrauding over 90 people of around ₹9 crore through the chit-fund business run by him.The arrest has created concern among residents in the district, with several people coming forward within days of his arrest to lodge complaints about money lost in Paulraj’s chit funds.DCB police officials told The Hindu that Paulraj started Divine Chit Funds at Kadayalumoodu in 2007 and registered the firm the same year. Hundreds of people are reported to have joined the chit funds and deposited money with him. Though he initially returned the amounts to subscribers, he allegedly began delaying payments in recent years and eventually absconded with his family.This prompted the first complainant in the case, Satheesh Kumar, 47, of Thirparappu, to lodge a complaint. He had paid a total of ₹8.83 lakh in multiple instalments after joining the chit in April 2022. Based on his complaint, a case was registered on December 10, 2025.Subsequently, several people affected by the alleged fraud lodged complaints, taking the total amount involved in the complaints to ₹5.21 crore by the time of Paulraj’s arrest.Since December 2025, following the continuous directions of Kanniyakumari District Superintendent of Police R. Stalin, the DCB police had been tracking Paulraj and traced him to a location in Chennai. He was arrested on Saturday (August 8) and remanded in judicial custody at the Kanniyakumari district jail in Nagercoil.During the preliminary inquiry, Paulraj allegedly told the police that the total amount involved in the chit-fund business could be close to ₹9 crore and that he would settle the dues with the affected subscribers, police sources said.However, following the news of his arrest, many people affected by the scam have been coming forward to lodge complaints in the past few days. The police expect the total amount involved to be considerably higher than ₹9 crore.According to the police, based on the complaints received so far, apart from several chits between ₹1 lakh and ₹10 lakh, around four people had joined a ₹25-lakh chit, one person had joined a ₹30-lakh chit, while around 15 members had joined chits involving more than ₹10 lakh.The police have appealed to members of the public affected by the alleged chit-fund scam to come forward and lodge complaints. Published - August 13, 2026 09:44 pm IST