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Odisha: Retired headmaster, banker son arrested for ₹5.56-crore fraud over 6 years
The fraud came to light during a special audit conducted by the school and mass education department.
The Odisha vigilance department has busted a family-run scam that went undetected for nearly six years, arresting a bank branch head and his retired headmaster father for allegedly siphoning off ₹5.56 crore from government funds in Bhadrak district.
Matruprasad Mohanty, branch head of Jana Small Finance Bank in Bhadrak, was arrested on Wednesday for his alleged role in routing siphoned funds. The alleged mastermind, his father Pradip Kumar Mohanty, a retired headmaster reappointed in the Korei Block education officer office, was arrested early Thursday along with his wife Gitarani Mohanty from a hotel in the Charampa area of Bhadrak.
According to Vigilance officials, Pradip Mohanty, who had been working in the Korei BEO office since 2018 on reappointment, allegedly exploited the government’s Human Resource Management System (HRMS) to manipulate records of 13 retired teachers. He is accused of marking pensioners as “active” employees in the system, altering their bank account details, and generating fraudulent salary bills in their names.
Between November 2018 and September 2024, the accused allegedly siphoned off ₹5.56 crore by diverting funds into multiple bank accounts in State Bank of India linked to family members and associates. These included accounts held by his son Matruprasad Mohanty, wife Gitarani Mohanty, domestic help Monalisa Pani, and Dilip Kumar Mohanty, an employee in the salary section of the Jajpur District Education Officer’s office.
“The accused created a web of transactions across multiple accounts to avoid detection,” a vigilance officer said, adding that several accounts in different State Bank of India branches were used to layer the funds.
HT sent a mail to higher officials of Jana Small Finance Bank seeking their reaction to the incident of their branch manager allegedly colluding in the diversion of public funds over nearly six years, but did not receive any reply.
The fraud came to light during a special audit conducted by the school and mass education department, following which departmental secretary N Thirumala Naik directed immediate action. Acting on these instructions, Jajpur district collector Amber Kumar Kar asked district education officer Maheshwar Sahu to file complaints with police and Vigilance authorities and initiate disciplinary proceedings.
Officials said two junior clerks of the Korei BEO office have been transferred to the district education officer’s office and their salaries withheld pending inquiry. The pension of Pradip Mohanty has also been stopped, and bank accounts of his immediate family members have been frozen. The BEO of Korei has also been transferred.
Officials said Pradip Mohanty and his wife were initially suspected to be hiding in Kolkata. Vigilance teams conducted searches at multiple locations there before tracking their movement back to Odisha. “Sensing pressure, they left Kolkata and checked into a hotel in Bhadrak, where they were apprehended early Thursday,” an officer said.
Director of Vigilance YK Jethwa said a case has been registered under provisions of the Prevention of Corruption Act, 2018, along with relevant sections of the IPC. “The role of all individuals linked to the transactions is under investigation,” he said.
All three accused are currently being interrogated. Vigilance officials said further arrests are not ruled out as the probe expands into possible institutional lapses.
