Mumbai PF fraud: 37-year-old Chandan Kumar Sinha, the mastermind of the scam, is posted as a clerk in EPFO’s Kandivali office. It is alleged that he used 817 bank accounts to scam Rs 21.5 crore.
Mumbai. During March 2020 to June 2021, when the focus of the people of the country was to fight the rising epidemic (Covid-19 Pandemic) and protect themselves amid the lockdown, the employees of the Employees’ Provident Fund Organization (EPFO) Mumbai office allegedly colluded. The PF Fund scam of Rs 21 crore has been carried out. This fund was a common PF pool, on which the EPFO ​​employee resorted to fraudulent withdrawal to clean his hands. The Indian Express has given information quoting documents related to the internal investigation of EPFO.
In the investigation of EPFO, the mastermind of this scam has been found Chandan Kumar Sinha. Sinha, 37, is posted as a clerk in EPFO’s Kandivali officer and used 817 bank accounts to scam Rs 21.5 crore. These bank accounts belonged to migrant laborers, through which Sinha deposited Rs 21.5 crores in his accounts.
Sources have told The Indian Express that out of the accounts from which money has been withdrawn, 90 percent of the money has been transferred to some other account. Scam accused Sinha is absconding and is among five employees of the EPFO ​​office who have been suspended for their alleged involvement in the scam. Sources said that as soon as the internal probe is completed, the EPFO ​​will hand over the matter to the CBI.
Although the internal investigation is currently focused only on the Kandivali office, but this scam has alerted all the offices of EPFO. EPFO is the world’s largest social security organization in terms of client and financial transactions. Directly or indirectly, EPFO ​​handles transactions of more than Rs 18 lakh crores of individual savings. EPF membership is a sign of formal employment.
The ‘scam is like a robbery in a bank’ The
fraudulently withdrawn money from the EPFO ​​fund is linked to the pool fund, which is deposited every month by the organizations affiliated to the EPFO. Normally EPFO ​​invests this money in government securities. A senior official told The Indian Express, “No personal account was misused in the scam. The money has been withdrawn in the fraud, which was the pool fund and this is the loss of EPFO, not of any person. It is like a robbery in a bank in a way.”
The enormity of the scam is being gauged from the fact that EPFO ​​is now going to change its process so that all withdrawals are secured. The organization has also ordered an internal inquiry into at least 12 lakh PF claims made from Kandivali office. These claims have been made between March 2019 and April 2021.
Taking advantage of system flaws
Officials said that the scam suspects have managed to escape due to some flaws in the system. He said the scam was perpetrated at a time when the organization had relaxed its rules and assigned several responsibilities to its employees related to confirmation and approval of PF withdrawals. In the situation arising due to the epidemic, these people also had the responsibility of managing the records related to the evacuation of people.
In such a situation, the employees misused the system using the password, the senior officers were at home due to the lockdown and they shared the password with their subordinates. In this situation, the PF withdrawal range was between 1 lakh to 3 lakh, the system highlights the withdrawal above 5 lakh, and these withdrawals are allowed only after a second confirmation by the senior officer.
EPFO has come to know in its investigation that some officials of Kandivali branch have helped Chandan Kumar Sinha in the scam. A senior official said, “It is a matter of shame that our officers shared their password with Sinha, and they did not even care to change the password later.”
Know the accused Chandan Kumar Sinha
Chandan Kumar Sinha took a bachelor’s degree in Philosophy from Magadha University in Gaya, Bihar in 2005. After the matter came to light in early July, he got himself admitted to a local hospital and has been missing since then. EPFO officials, who were in touch with Sinha earlier, described him as friendly and flamboyant. “We learned that he has expensive cars and several sports bikes, including Harley Davidsons,” said an official.
How the scam busted
Sources said the scam came to light after the EPFO ​​received an anonymous complaint, believed to have been made by a relative of Sinha, who was jealous about his lifestyle. One of the main characters of the scam is Sinha’s accomplice Abhijit Onkar, who was his kind of clerk and allegedly helped him manage the bank account.
What is needed
to withdraw money Officials said that the first thing for withdrawal of money is the bank account and then the Aadhaar details of the account holder, which were mostly of migrant laborers, which have been obtained by paying a commission of Rs 5 thousand. Officials said that after getting so much information, the PF account was opened. These accounts belonged to companies which were earlier in Mumbai, but were closed 10 to 15 years ago. Being an old account before 2014, the mandatory UAN number is generated only at the time of withdrawal of money.
EPFO has clearly found in its investigation that Sinha has done B. The accounts of Vijay Kumar Jewelers Pvt Ltd, Landmark Jewelery Pvt Ltd, New Nirmal Industries, Saathi Wear Corporation and National Wires have been cleared. All these companies were closed in 2006. After the scam came to light, EPFO ​​has directed its senior officers to check the system and process. Along with this, the organization has decided that the password given to all the employees to gain access to the EPFO ​​system will be valid only for 15 days, otherwise it is changed and EPFO ​​will no longer assign multiple responsibilities to its employees at once.
What did EPFO ​​do?
The EPFO ​​has also written to banks related to 817 bank accounts used in the scam, asking them to freeze the money transferred through fraud. So far only around 2 crore money has been recovered in the scam. Along with this, EPFO ​​is also planning to attach the properties of all the accused officers. An official said that in view of the scam, the EPFO ​​is considering recovery of money from the salary of the accused officers under CrPC.
