In short, Padmanabahn doesn't seem like the kind of guy to get taken for a sucker, but that's exactly what happened. Padmanabahn and dozens of fellow Indians handed thousands of dollars last year to Suman Varanasi, CEO of Zenstra Solutions Inc., a seemingly prosperous Dallas-based IT contracting company. Varanasi promised work visas and, in many cases, jobs to skilled Indian software designers eager to hook up with American companies. But the jobs and visas never materialized, despite Varanasi's constant pleas for patience. Then, about the time the promised refund checks started bouncing early this year, Varanasi disappeared.
Padmanabahn's story is fairly representative. Because he was already in the United States and had a local bank account, he agreed to handle the logistics for a female friend in India who had landed a staff position at Zenstra Solutions itself, according to a letter sent in August 2004. As a Dallas resident, Padmanabahn had the advantage of being able to confirm the offer in person. He set up an appointment to visit Zenstra's office in a gleaming high-rise on Dallas Parkway just north of LBJ Freeway. "It was, you know, an office," Padmanabahn says. "There was a secretary, people were walking around, phones were ringing. I asked to see Suman Varanasi, and after I waited for a few minutes, he came out to meet me."
Varanasi was young, 35 or so, but in the IT industry a 35-year-old CEO is hardly a rarity. He was pleasant, with a soft, high-pitched voice, a firm handshake and a quick wit. Others describe him as mild-mannered, a man who dressed modestly and drove a nondescript 5-year-old mid-range car. Nothing about Varanasi would set off any alarm bells.
But before he wrote a check, Padmanabahn went further. He began to see what he could find on Zenstra Solutions on the Internet, and there was plenty. The Dallas Morning News mentions multiple executive hires at Zenstra dating back to 2003. There was the April 8, 2004, press release trumpeting the company's new office in Austin. There was a June 2004 editorial by Varanasi in the Dallas Business Journal discussing the future of outsourcing and another in the IndUS Business Journal cogently tackling the implications of the 2002 Sarbanes-Oxley Act.
Most impressive of all was a glowing May 2004 article that appeared in the Plano Star-Courier. Under the headline "Company demonstrates positive side of outsourcing," staff writer A. Lee Graham quotes Varanasi extensively as an outsourcing expert. In the world according to Google, Zenstra was on the rise. "I wasn't stupid," Padmanabahn says. "I searched for the company and found the letters he had written. I even found that they had an internship." Sure enough, Zenstra is listed as an employer on a 2003 list of the University of Texas at Dallas' internships.
But most of all, there was the company's slick, sprawling Web site. The site vanished this year along with Varanasi, but while it was up it offered a convincing, if vague, portrait of a successful enterprise. Each page was decorated with reassuring clip art--smiling, suit-clad businessmen, a pair of designer glasses resting on the financial section of a newspaper. There was also plenty of dense business jargon. One typical sentence: "Our exceptional service delivery is a result of operational excellence achieved through the use of high-quality disciplined processes, appropriate methodologies, and the application of process and project management expertise by well-trained, highly-qualified and accountable personnel with well-defined roles."
Yet despite all of Padmanabahn's research, over the following months he realized he'd been duped. At first Varanasi stalled, then in January issued a refund check that promptly bounced. What Padmanabahn had thought was Zenstra's bustling headquarters turned out to be a branch of Premier Office Centers, a company offering short-term workspace to all comers, complete with secretary. The branch office in Austin proved to be fictitious. The Web site also listed a seventh-floor address in India, in a building that has only five floors. Finally in March, communication with Varanasi ceased altogether. "The last e-mail he sent me was a one-liner," Padmanabahn says. "It said something like, 'The company is bankrupt, and I think you know this.'"
That came as news not only to the countless aspiring engineers who had given money to Varanasi but also to the government. On March 18 the state of Texas revoked Zenstra Solutions Inc.'s charter for nonpayment of franchise taxes. By that point numerous complaints had already prompted state investigators and FBI agents to begin questioning former Zenstra employees, who say they had no idea that their company was even in the visa business.
"Apparently there were some dealings with some foreign nationals that weren't what they should have been," says Richard Peritore, former senior vice president of sales at Zenstra Solutions. He says his grandiose title described a simple sales position he held, as did six others. He worked at Zenstra for four months in 2004 and got paid for two of them. Up until November of last year, Peritore dutifully called IT firms trying to interest them in the services Varanasi said he could provide, but reputable companies had never heard of Zenstra. "We didn't close a single account while I was there," Peritore says.
Unbeknownst to Peritore, Varanasi's illicit sideline was booming. Want ads placed on India-oriented and tech Web sites attracted plenty of interest and seemed completely plausible, given U.S. companies' insatiable demand for computer experts. "Suman Varanasi, in 2004...offered me a job as a software consultant and enticed me into giving him $3,150," writes one victim from Herndon, Virginia. "Suman Varanasi had promised me to get a green card in July 2004, for which I paid him USD $3,000," says another from Toronto, Canada. Victims began to connect with each other in Internet tech chat rooms and consumer Web sites such as www.ripoffreport.com. At least 50 victims would eventually emerge. It is likely that many others are too embarrassed to come forward.
Peritore began getting angry phone calls from people looking for Varanasi. "You know things are going wrong when the boss starts getting hard to find," he says. "Unfortunately, I didn't have access to the information they were looking for." Tonya Kelley, a receptionist at Premier Office Centers, was also deluged with calls, and still is. "People are calling left and right," she says. She has developed a rapid-fire spiel to cut off the complainants. "Everybody's after them: the state, the IRS, the feds," she tells them. "They're totally out of here, they're gone, they're out of business--most likely they're in India."
At least one person caught in Varanasi's scam did manage to get his money back. Subramaniam Shanmugham is an engineer in Aledo, a town west of Fort Worth. In the fall of 2003 he got what he thought was good news: His fiancée back in India had landed a job in Dallas with Zenstra Solutions. Only the $1,800 that Varanasi requested for a visa stood between the happy couple. On December 5, 2003, Shanmugham drove to the Zenstra office and handed over a check, and thus began a year of frustration.
Finally, in November 2004, Varanasi agreed to provide a refund. The check bounced, and then a second followed suit. Only after Shanmugham threatened a lawsuit in January did Varanasi pay up, even covering $160 in bank fees. Shanmugham insisted on cash. Meanwhile, his fiancée had missed out on a job opportunity in Italy and their relationship was strained nearly to the breaking point. "It was very embarrassing," Shanmugham says. "$1,960 does not make up for two years of spouses being apart."
Most others wound up with nothing at all. Gagandeep Bhatia is still hoping to get his $3,150 back. His contract in the United States was ending, and Varanasi promised him a job and a visa renewal. "After receiving the check, he started making wild excuses about causing delays in filing applications, and even refused to take my calls on his cell," Bhatia writes in an e-mail to the Dallas Observer. Eventually his visa expired. "I had to return back to my country duped by this thief."
"What we do is very straightforward," reads one Zenstra Web page. "It is the way we do it that sets us apart." It's a statement that in retrospect is both true and rich with irony. Peritore has given up hope iof recovering his lost wages and has left the IT industry. "This is a situation where you're blindsided," he says. "It kind of redirected my path." The FBI and the Texas attorney general follow a policy of never commenting on investigations. Attorney general spokesman Tom Kelley did offer some advice: "We certainly encourage anyone who has bad experiences with any company to file a complaint with us if they believe they've been defrauded or misled in any way." Ashok Padmanabahn doubts that Varanasi will ever see an American courtroom, but he hasn't given up on justice. "I trust in God," he says. "I believe that one day he will pay the price."