Business Today, one of the
well-known publications of India, did a story in 2008 on the rising women
entrepreneurs in India. Titled, ‘Nothing is Impossible: On the Power Track’,
the story featured 10 women entrepreneurs for whom ‘nothing was impossible’. Madhavi
Vuppalapati, chairperson of Prithvi Information Solutions, was also one of the
women on the list. (businesstoday.intoday.in/story/nothing-is-impossible-on-the-power-track/10/3149.html) Her claim to fame was setting up the company at the
age of 26.
Cut to 2014 – United States District
Court Western District of Washington at Seattle entered a judgment against
Prithvi Solutions Inc. ordering them to pay over $17 million to Kyko Global
Inc. on account of fraudulent activities. From
being called as a rising star to being held guilty of fraud and deceit, Madhavi
Vuppalapati’s life has changed dramatically.
Early Life
Madhavi Vuppalapati was born in Chirala,
in the southeastern state of Andhra Pradesh, India. She did her Bachelor of
Engineering (BE) in computer science from Osmania University in Hyderabad. Two
years after being awarded the BE degree, she went to US to pursue Masters Degree
in Computational Mechanics in Carnegie Mellon University.
Business in USA
After working in the Pittsburgh area
for around three years, she decided to set up her own company. Prithvi
Information Solutions was formed in 1998 and focused on providing software
R&D and data analytics services. The company also provided consulting work
initially and expanded it to software and IT, done from its India facility.
Involvement in Business Fraud
On June 17, 2013, Kyko Global GMBH
and Kyko Global Inc, filed a Fraud or Truth-In-Lending suit against Prithvi
Information Solutions in the Seattle office of Washington Western District
Court. According to the plaintiffs, Madhavi Vuppalapati’s company, Prithvi
Information Solutions, and its affiliates had created fictitious, counterfeit
customers to get an advance payment of $17 million from Kyko Global Inc. The
court arrived at a judgment in September 2013 and ordered Prithvi Information
Solutions to pay $17,568,854 plus $796,776 as additional damages for the fraud.
Keeping in view Madhavi Vuppalapati’s involvement in the business fraud, her
assets and property have been seized by the Sheriff King County.
The Fraud
In November 2011, Kyko Global, an
Ontario-based company, entered into an agreement with Prithvi Information
Solutions for certain factoring services. According to the agreement, Prithvi
Information Solution had to identify certain of its customer account receivable
for IT services and authorize direct payment on those customer accounts
receivable to be made to Kyko in exchange for a portion of the amount
outstanding from its customers to be paid immediately by Kyko.
Prithvi Information Solutions
offered to Kyko account receivables for the following major customers, Dick’s
Sporting Goods, Enterprise Product Partners, Financial Oxygen, Huawei, L3
Communications. However, the reality was that none of these companies had any
current business relationship with Prithvi Information Solutions. When Kyko
tried to acknowledge that these clients will make payments directly to Kyko,
they got verifications, but in reality, it was the associates of Prithvi
Information Solutions that had posed as clients and created and executed the
verifications. When Kyko requested Madhavi Vuppalapati that they be put in
touch directly with the representatives of the five clients, she turned down
the request saying that it will be detrimental to their relationships with
these clients.
The Vicious Circle of Deceit
Over a period of around two years,
Madhavi Vuppalapati and her associates continuously deceived the unsuspecting
Kyko, in the process, coming up with one excuse or the other to keep them in
the dark. Finally, while attempting to collect outstanding dues, Kyko came to
know, through its own internal investigation that Prithvi Information Solutions
had created fictitious customers to deceive Kyko and extract more monies from
it. In order to get its money back, Kyko filed a lawsuit on 17th of
June against Prithvi Information Solutions at the United States District Court,
Western District of Washington at Seattle.
On August 8, 2013, Kyko moved the
court for issuance of judgment in amount against defendants pursuant to
confession of judgment and the motion was granted by the court.
Jury Enters a Judgment
On September 6, 2013, the jury entered
a judgment against Prithvi Information Solutions in the amount of $17,568,854 plus
prejudgment interest accruing at the rate agreed to between the parties at
2.45% per month in the total amount of $796,776.
On September 2013, Kyko filed a Writ
of Garnishment against Prithvi Information Solutions. Kyko claimed damages to
the tune of $18,431,765,90 inclusive of balance of judgment, prejudgment
interest, and interest of judgment from 9th June, 2013 to September
23rd, 2013.
Auction & Sale of Madhavi Vuppalapati’s Personal
Property
On
February 12, 2014, Madhavi Vuppalapati received court’s notice for sale of
personal property and directed the Sheriff to auction and sell her 2006 Lexus
RX4005D. The Sheriff was also directed to auction and sell her jewelry and miscellaneous
household items.