The Central Bureau of Investigation (CBI) has registered a corruption and cheating case against three officials of Employees' Provident Fund Organisation or EPFO for allegedly siphoning off around 2.71 crore between March last year and June when the pension fund organization had relaxed the norms for withdrawals amid job losses due to lockdown. The case was registered based on a complaint from the Vigilance Department of Employees' Provident Fund Organization.
The "mastermind" of this scam was a senior Social Security Assistant in the Kandivali Regional office, sources in the CBI told NDTV. The official, Chandan Kumar Sinha, has been charged along with Uttam Tagaray and Vijay Jarpe, both Assistant Provident Fund Commissioner in Coimbatore and Chennai regional offices.
The Vigilance Department of the EPFO learned about the scam on May 18 following a tip-off by an anonymous person, NDTV has learned. Soon after, the department started an internal audit which revealed that crores have been siphoned off from the Pension Fund corpus through manipulation of the system by the insiders. Based on the revelations, the EPFO filed the complaint with CBI on August 24.
According to the sources, the accused knew the system and its loopholes well and used the data of migrant workers to defraud the organization during the pandemic.
"The modus operandi of this racket involved them creating bogus PF accounts using bank account and Aadhar collected from migrant workers and poor people for which they paid a small 'commission'. They then portrayed them as employees of companies shut down by the pandemic and withdrew the amount by filing fake claims," sources added.
Aware that only withdrawals above five lakhs are flagged and sent for second verification to senior officers, the accused made claims and withdrawals between Rs 2-3.5 lakh.
As per the CBI's FIR, "around 91 fraudulent claim settlements were made in the PF accounts of Mumbai based M/s B Vijay Kumar Jewelers which had shut operations in September 2009 and marked as closed establishment in EPF records."
"During March 2020 - June 2021 fraudulent payments resulting in loss of Rs 2,71,45,513 to the EPF corpus were made through claims in physical format from bogus members which were settled by Chandan Kumar Sinha and the respective approving authorities," the FIR adds.
The EPFO has informed CBI that the fraud is not restricted to M/s B Vijay Kumar Jewelers, but they suspect similar fraud in the accounts of at least four more closed establishments with over 800 fraudulent claim settlements and loss of several crores.
"The claims are found to be settled to members with bank accounts in different parts of the country such as Mumbai, Gorakhpur, Nashik, Patna, Ghaziabad and Mathura etc. In conspectus the case involves wrongful loss cost to the EPF corpus due to criminal misconduct and conspiracy by public servants and private persons and has pan India ramifications warranting a detailed investigation and appropriate legal action in this matter," EPFO has said in its complaint.
While the EPFO has written to banks to freeze 800-odd bank accounts that had received fraudulent claims, sources say money was withdrawn from these accounts before it was flagged to them.
"Enquiry has revealed transactions in the salary account of Chandan Kumar Sinha reflect credits of Rs 30,36,560 as against salary receipt of Rs 12,90,057 during the period April 2019 to July 2021 which indicates the possibility of acquisition of assets disproportionate to income as well through unfair means," agency sources say.
EPFO manages around 18 lakh crore savings of employees across the country.