Bank Fraud

LC Fraud in SBI, Branch Manager sentenced 10 years Jail by CBI Court


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SBI (State Bank of India): The Special Judge for CBI Cases in Ahmedabad, Gujarat, has sentenced two individuals, including Shri Deepak L. Dave, the former Branch Manager of SBI’s Atladara Branch, and Shri Paresh Dave, a private individual and partner at M/s. Gujarat Glass Co., to 10 years of rigorous imprisonment (RI) along with a total fine of Rs. 6.41 crore (Rs. 641.5 lakh) in a bank fraud case. The majority of the fine, totaling Rs. 6.4 crore, was imposed on Paresh Dave, while the fine for Deepak L. Dave amounted to Rs. 1.5 lakh. 

This case involves a scheme to cheat the State Bank of India (SBI), allegedly led by Deepak Dave, who was the Branch Manager at SBI’s Atladra Branch, along with others named Paresh Dave, Paryank Dave, Parshuram Dave, Sushila Dave, and an employee named B.K. Mody. The alleged fraud took place between 1995 and 1997, causing SBI a financial loss of ₹2.44 crores and also defrauding another bank, CBI, of about ₹5.99 crores. The fraud was based on fake property documents, forged Letters of Credit (LCs), and illegal cash withdrawals. Also Read: SBI AGM sent to Jail by CBI Court

The prosecution claims that Deepak Dave, in his position as Branch Manager, approved credit (loans) to businesses owned by Paresh Dave, his brother Paryank Dave, and their father Parshuram Dave. These three created two fake companies – Gujarat Graphics & Mirrors (GGM) and Gujarat Glass Company (GGC) – to obtain loans from SBI. They submitted fake property documents, pretending to own properties that either didn’t exist or weren’t theirs.

It is alleged that Deepak Dave, working together with the others, accepted these fake documents without checking if they were real and approved the loans. The documents provided by Sushila Dave, acting as a power of attorney for Paryank Dave, were also fake. Even the Title Clearance Certificate, which was supposed to confirm the legality of the property, was forged. Click here to read more CBI cases.

The prosecution further claims that the accused also created fake Letters of Credit (LCs), which were supposed to be from foreign banks like Chase Manhattan Bank. Paresh Dave faked documents to make it look like they were exporting goods to foreign companies. These fake LCs were used to get money from SBI’s Baroda Main Branch, with the funds being released based on the fraudulent documents. The money was then transferred to the accounts of GGM, GGC, and another business called Maple Systems, run by Maulik Dave, who was related to Paresh Dave. Large sums of this money were then withdrawn in cash by B.K. Mody from the SBI Atladra Branch, where Deepak Dave was in charge. Click here to read more SBI news.

The investigation found that 19 of the LCs were fake. While some of the money from the LCs was paid back, it was not from the banks mentioned in the LCs. A large amount of the money was never recovered.

The investigation also discovered that Deepak Dave received a Maruti Van as a bribe from Paresh Dave for helping with the fraudulent activities. This van was bought using money from the defrauded bank accounts, further proving the connection between the accused. At the end of the investigation, the CBI filed formal charges against all six individuals. Click here to read more ED cases.

Court Order

Shri Deepak L. Dave, the first accused, has been convicted under Sections 120(B), 420, 467, 468, and 471 of the Indian Penal Code, as well as under Section 13(2) of the Prevention of Corruption Act, 1988. His sentence under Section 248(2) of the Criminal Procedure Code is as follows:

  1. Under Section 13(2) of the Prevention of Corruption Act, 1988, he is sentenced to 5 years of rigorous imprisonment and fined ₹50,000. In case of non-payment of the fine, he will serve an additional 1 year of simple imprisonment.
  2. Under Section 120(B) of the Indian Penal Code, he is sentenced to 5 years of rigorous imprisonment and fined ₹50,000. If the fine is not paid, he will serve an additional 1 year of simple imprisonment.
  3. Under Sections 420, 467, 468, and 471 of the Indian Penal Code (collectively), he is sentenced to 10 years of rigorous imprisonment and fined ₹1,00,000. Failure to pay this fine will result in an additional 2 years of simple imprisonment.

Shri Paresh Parshuram Dave, the second accused, has been convicted under Sections 120(B), 420, 467, 468, and 471 of the Indian Penal Code. His sentence under Section 248(2) of the Criminal Procedure Code is as follows:

  1. Under Section 120(B) of the Indian Penal Code, he is sentenced to 5 years of rigorous imprisonment and fined ₹1,00,000. In case of non-payment of the fine, he will serve an additional 1 year of simple imprisonment.
  2. Under Sections 420, 467, 468, and 471 of the Indian Penal Code (collectively), he is sentenced to 10 years of rigorous imprisonment and fined ₹6.40 crores. If the fine is not paid, he will serve an additional 2 years of simple imprisonment.

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