Investigators unravel modus operandi of multi-crore govt fund transfer scam in Bhagalpur
The NGO, working in connivance with bank and treasury officials, used to divert government funds into its accounts by writing its account number on the reverse side of government cheques.india Updated: Aug 14, 2017 17:16 IST
Investigators probing the multi-crore scam, involving transfer of government funds to an NGO in Bihar’s Bhagalpur district, have unraveled its modus operandi.
Working in cahoots with bankers and treasury officials, the NGO concerned — the Srijan Mahila Sahyog Samiti — used to surreptitiously divert government funds into its accounts by writing its account number on the reverse side of cheques, issued by district treasuries to different government departments.
To escape getting noticed, it developed a system to generate doctored e-statement of the bank. These statements, mentioning the correct account balance and interest accrued on it, were regularly sent to government offices for record keeping. However, the same did not reflect in actual bank records, as the NGO could not tamper the banking software.
Interestingly, the NGO also fudged bank passbooks and escaped government audit between 2007 and 2014.
The modus operandi of the NGO was to fraudulently divert government funds into its account and earn interest on the principal amount, while leaving it intact.
Inspector-general of police (IG), economic offence unit (EOU), Jitendra Singh Gangwar, heading the probe, told the Hindustan Times, “We have seized the laptop using the fake banking software, printer, pen drives and purported copies of bank e-statements. Nine people have been arrested.”
- NGO Srijan swindled government funds from 2007-14 without getting noticed
- Bhagalpur district administration believed forged bank e-statements
- Bank e-statements, which govt offices relied on, did not bear any signature
- Nine FIRs lodged so far; NGO operation also found in Kosi division
- Investigators have traced eight bank accounts of Srijan, suspect over 24
The scam could go past Rs 700 crore, as the investigating agencies were trying to trace the NGO’s activities beyond Bhagalpur, as it also operated through self-help groups (SHGs).
“The NGO also offered loans to villagers at exorbitant rate of interest. This ensured good returns though it also had an element of risk in terms of bad debt,” said Gangwar. The scam continued for seven years between 2007 and 2014. Nine FIRs have so far been registered on the basis of statements by different departments, he added.
Srijan also operated in the Kosi region. “We have so far discovered eight accounts with the Bank of Baroda and the Indian Bank. We suspect there are over 24 accounts of the NGO and trying to ascertain them,” Gangwar said.
“We detected that in 2012-13, the NGO withdrew Rs 150 crore from its Bhagalpur account and transferred it to its Saharsa account two years later. As of now, we do not know why the money was transferred,” he added.
Officials believe that the ambit of the probe could go beyond Bhagalpur. They have reasons to believe that such an operation, in the name of SHGs, could be prevalent elsewhere too.
The NGO’s operation floundered after its founder Manorama Devi passed away in February. Her son Amit Kumar and daughter-in-law Priya Kumar have already been arrested. The Bhagalpur senior superintendent of police has written to the regional passport officer, Patna, to confiscate their passports.
Chief secretary Anjani Kumar Singh has now asked all district magistrates to get their accounts checked thoroughly, raising doubts that the government was also caught napping, even as it was the government, which eventually detected the scam.
Gangwar also expressed surprise how none took note of the fact that the doctored e-statements continued to arrive in government offices, even without anyone asking for it. “The purported bank e-statements did not even bear any signature of bank official,” he added.
A senior IAS officer was amused how the fraud escaped scrutiny, especially because inspection for reconciliation is a prerequisite whenever a change of guard takes place in a district.
The embarrassment the government now faces is in having to explain how, during all these years, the NGO circumvented its robust internal mechanism to prevent such frauds.
First Published: Aug 14, 2017 17:16 IST