On Thursday, ED conducted raids at three places of Kotak Mahindra Bank Manager Sumit Kumar in connection to Rs.31.93 crore fraud. In relation to this, his brother Saurabh Kumar has been arrested and sent to judicial custody till 12th January.
What is the Fraud all about?
The Enforcement Directorate (ED) has initiated a comprehensive investigation into a case involving 13 fraudulent transactions that took place between November 4 and December 15, 2020. The illicit movement of Rs 31.93 crore from government accounts has raised concerns about financial mismanagement and malpractice.
The case came under scrutiny after the Patna police registered a First Information Report (FIR), prompting the ED to delve into the matter. The focus of the investigation is on unauthorized transactions and potential money laundering activities.
Misappropriation from CALA cum DLAO Account
The funds in question were unlawfully transferred from the bank accounts of the Competent Authority for Land Acquisition cum District Land Acquisition Officer (CALA cum DLAO), Patna. These accounts held funds belonging to the National Highways Authority of India (NHAI), designated for land acquisition for government projects.
One of the primary beneficiaries of this fraudulent scheme is alleged to be Nita Singh, the wife of Sumit Kumar. Investigations reveal that Nita’s account received a substantial credit of Rs 9 crore since July 2019. These transactions are suspected to be indicative of money laundering practices.
Bank’s Oversight Lapses
Kotak Mahindra Bank, where the fraudulent transactions occurred, had previously received a money laundering alert in September-October 2019 concerning Nita’s account. However, the bank failed to detect the connection between Sumit’s personal email ID and the registered email ID in Nita’s account. This oversight allowed the manipulation of documents, including the forging of the Aadhaar card of Patna DLAO Pankaj Patel.
How Fraud was discovered?
The fraud came to light when an individual named Subham Kumar Gupta attempted to withdraw/transfer Rs 11.73 crore on January 2, 2021, using forged documents. Kotak Mahindra Bank officials became suspicious, alerted the police, and subsequently, Gupta was arrested. Upon further investigation, it was revealed that Rs 32 crore had already been siphoned from the same account in 2020. This raises questions about the internal checks and balances of the bank, as the fraud remained undetected for weeks until Gupta’s arrest.
Sumit Kumar, in collusion with accomplices, is alleged to have orchestrated the unauthorized transfer of funds from the CALA cum DLAO accounts. The misuse of his position allowed payments to be cleared without proper verification, highlighting a lapse in the system.
