Over 10 years and across two governments, of JD(U)-BJP and the RJD-JDU, one Bhagalpur NGO allegedly siphoned off an estimated Rs 700 crore of public funds. Nine FIRs and 12 arrests later, the Bihar government ordered a CBI probe Thursday.
An investigation by The Indian Express of police records, bank statements and interviews with key officials reveals how the little-known NGO, Srijan Mahila Vikas Sahyog Samiti Limited, providing vocational training to women and selling pickles, allegedly pilfered funds from Bhagalpur district administration’s various accounts for at least half a dozen welfare schemes. All with the alleged connivance of government officials, bank employees and, of course, Srijan’s own staff.
Three such cases of money transfer, as per FIRs, best illustrate the nature of the pilferage.
Case One: On September 27, 2014, Bhagalpur’s Tilkamanjji branch of the Oriental Bank of Commerce issued a cheque of Rs 12.20 crore. The cheque was presented at Indian Bank’s Patal Babu Road branch to be deposited in an account of the Mukhyamantri Nagar Vikas Yojana. But Indian Bank deposited the amount into Srijan’s account — Srijan was registered as a cooperative society barely three days after the cheque was issued. The deposit happened despite the fact that a third-party deposit, allowed after due endorsement until 2008, had been declared illegal by RBI to prevent money laundering.
Case Two: The Bhagalpur administration presented three cheques on September 1, 3 and 6, 2016 of cumulative value of Rs 5.5 crore at Indian Bank for deposit into the Mukhyamantri Nagar Vikas Yojana account. The funds were duly deposited but were later transferred to Srijan’s account via three cheques with allegedly “forged signatures” of the District Magistrate.
Case Three: On November 10, 2016, Chief Medical Officer, Bhagalpur, presented three cheques of cumulative value of Rs 43.52 lakh at Bank of Baroda’s Ghanta Ghar branch to be deposited in the government account. The cheques were rejected and returned on December 22, 2016 — but not before the funds were moved to Srijan’s accounts.
Case after such case is coming to light in the ongoing investigation that echoes the fodder scam with one twist: the fodder scam was related to withdrawal from district treasuries against fake bills and in Srijan’s case, it is, as per the FIRs, direct transfer of public funds to private accounts.
Among those arrested is the District Welfare Officer and investigators are wondering how and why auditors did not check such sustained “swindling” of government funds and why none of the nine District Magistrates, the sole custodian of these funds, waved a single red flag. Even the office of the Registrar of Cooperative Societies is under the scanner.
Police records show that key to the scam were two methods illustrated in the cases mentioned above.
One, through direct deposit of government funds to Srijan’s accounts through fake third-party endorsement. “We call it sweep method in which A (the state government) transfers money to B (Bhagalpur administration). The bank gets B to make a fake endorsement on the back of cheque to deposit it to C (Srijan in this case),” said Bhagalpur SSP Manoj Kumar.
The second method is via the “forged cheque.” Under this, for any government account, a valid cheque series is issued but a duplicate cheque series is also released and given to Srijan which would forge the DM’s signature to transfer the funds into its account, said Kumar.
At the two bank branches under probe, Indian Bank’s Patal Babu Road branch and Bank of Baroda’s Ghanta Ghar branch, both government and Srijan kept accounts. The police have seized several cheque books from government offices having Srijan bank account numbers written overleaf.
The scam first came to light after a government cheque of Rs 270 crore — meant to be paid to farmers in return for their land for a power plant — bounced on August 4.
District Magistrate Adarsh Titarmare conducted an internal inquiry and found that the government account didn’t have funds following which Chief Minister Nitish Kumar sent an Economic Offences Unit team to Bhagalpur.
The bouncing of the cheque revealed another aspect of the pilferage. Investigators found that on earlier occasions, whenever a cheque from the government was presented at the two bank branches, a bank employee or a government clerk would alert Srijan founder secretary Manorama Devi. Srijan would promptly deposit the required amount in the government account to ensure the cheque did not bounce so that the fraud wasn’t detected.
Manorama Devi died this February — her death, police say, was one key reason for the detection of the scam. Since cheques started to bounce once her daughter-in-law Priya Kumar took over. Kumar and her husband Amit Kumar are on the run, police said.
The list of alleged transfers goes on and on. Official records accessed by The Indian Express show:
* On August 8, the Bhagalpur administration’s Backward Region Grant Fund account statement in Bank of Baroda showed that Rs 18.62 lakh was missing.
* Checked on November 2013, as much as Rs 11 crore was missing from the Fourth State Finance Commission account in Bank of Baroda.
*A government bank account was opened with amount of Rs 10.92 crore on March 26, 2017. In April 2017, the balance was zero.
*Zila Parishad, Bhagalpur, opened an account for Mukhyamantri Gramodaya Yojana with Bank of Baroda on June 16, 2013 with deposit amount of Rs 1.49 crore. The latest bank statement shows Rs 96 lakh missing.
Current DM Titarmare is also under the scanner because he reportedly asked District Welfare Officer Arun Kumar to open a fresh account in Bank of Baroda in November 2016 despite the welfare department already having an account with Bank of Baroda.
Arun Kumar told police in his confession statement that he was asked to withdraw Rs 6 crore from an account in the Punjab National Bank and deposit it in the new Bank of Baroda account opened on November 8, 2016. On November 10, police records show, the amount was credited to Srijan’s account.
Asked about this, Titarmare said: “The matter is under investigation.” Asked if he had told Kumar to open a new account, he declined to comment.
Some Government officials claim that they were unaware of the swindling since Srijan fudged records and tampered with bank statements. The man behind this, police say, was Manorama Devi’s assistant Bansidhar Jha who has since been arrested.
The key accused, police said, were also beneficiaries of the alleged corruption and range from clerks to officers.
District Welfare Officer Kumar, who started his career as a block welfare officer in Patna in 1989, now has a flat each in Patna and Bhagalpur and a 4,000-sq-ft prime plot at Adarsh Nagar in Patna besides two shops worth Rs 75 lakh each in the city. His wife is suspected to have Rs 1.5 crore in her bank account, police said. Srijan, police said, also gave a cheque of Rs 10 lakh to Kumar’s daughter-in-law.
Another arrested person, Mahesh Mandal, a clerk in the government’s welfare department, has built a 26-room house in his village Jagdishpur, 10 km from Bhagalpur. Mandal, who joined as a clerk in 1982, said he was introduced to Manorama Devi by her brother-in-law Sunil Kumar. Mandal reportedly worked as a conduit between the bank, government and Srijan. His job was to provide original bank statements to Manorama Devi. Mandal has declared the value of his house as Rs 1.25 crore.
His son Shiv Mandal is Zila Parishad member and Bhagalpur district youth wing president of JD(U). Mandal, according to the police, owns four trucks, four cars, a tractor, seven bighas of agricultural land and a prime plot in Bhagalpur. Police said that Mandal has admitted to receiving Rs 3 crore as commission from Srijan over the last 15 years.
Prem Kumar, stenographer of District Magistrate Titarmare, had 16 bank accounts. The value of his property is being assessed. Vinod Kumar, a former driver of Srijan, who allegedly used to carry fake passbooks and forged bank statements, now owns eight cars and runs a transport agency.
Among those arrested are: Ajay Pandey, Indian Bank branch manager; Satish Chandra Jha, auditor, Srijan; Sarita Jha, Manager, Srijan; Arun Kumar Singh, former branch manager, Bank of Baroda. No one from Priya Kumar’s family was available at her Vikramshila Colony house for comment.
Bank of Baroda, Ghanta Ghar, branch manager Navin Kumar Saha said: “The bank has been co-operating with the police. There are standing instructions from our GM (Operations and services) to use a machine to check authenticity of cheques and ascertain the authenticity of payees in case of high-value cheques”.
Indian Bank Patal Babu Road assistant manager PN Dutta said: “I am not the competent authority to comment”.