Thousands of Americans received similar calls from nine call centres at Thane near Mumbai. They were threatened with a tax investigation by executives pretending to be American Internal Revenue Services or IRS officials.
To escape an investigation, many unsuspecting Americans agreed to pay anywhere between 500 and 60,000 dollars.
These call centres scammed nearly 6,500 Americans and estimates suggest collected over 36 million dollars.
On Tuesday night, as the workers started dialing America, some 200 policemen swooped in to cut the lines. Nearly 800 workers were questioned through the night and 70 of them were finally arrested - among them the eight kingpins who came up with the "business model". The rest were let off with a warning.
"They would call people and say that if they didn't pay then the cops would come and raid their house in half an hour," said Thane police chief Param Bir Singh.
"My son has been working for a week. They told us they have to make recovery calls for credit card and debit card companies," said one parent.
The owner of one of the companies, reportedly based in the US, allegedly stole information and passed it on.
Investigators say one or two of every 100 call would hit the mark.
In raids that started last evening and continued till the early hours today, computer, laptops and other hardware were also seized.