Police sources in Mangalore say that the gang is active in Karnataka and Goa.
The modus operandi of this gang is to trap students, shoot obscene videos and later blackmail them.
The gang, against which there are several complaints, have demanded anything between Rs 10 lakh and Rs 25 lakh from the victims.
They operate mainly outside colleges and trap couples, a police officer part of the investigation said.
The Mangalore police recently registered a case on a complaint filed by two students. They said they were forced into an obscene act and videos were shot. The gang of five, who spoke in Malayalam, demanded Rs 25 lakh failing which they threatened to upload the pictures on the internet.
Many of the students have not complained fearing for their lives. The gang when it approaches students often threaten them with knives and guns, the complaint also states.
According to investigations many students are unable to lay the amount. Some of the videos get uploaded on the internet and some are made into CDs and distributed. Kerala has been notorious for the porn racket for several years now. There is a great demand for such videos.
The police say that most CDs are not released in India but are sent abroad, especially to the Gulf. CDs are often sold to touts for Rs 5 to Rs 10 lakh in the Gulf who in turn sell them at anything between Rs 500 and Rs 1000 based on the demand.
In Goa there have been several instances of this gang targeting foreign tourists. But according to the police the racket is far more serious among Indians since there is more demand for such videos.
The Karnataka police have sought the help of their counterparts in Kerala to bust this gang. They often operate in Karnataka and then return to Kerala from where they market the videos.
The porn industry is worth over Rs 5,000 crore in India. With the advent of smartphones the demand has only increased. A survey conducted by the IMRB shows that one out of five cell phone users in India views porn on the mobile. This has led to a great demand of video clips for cell phones.
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