SOURCE : TIMESOFINDIA
NEW DELHI: In a financial fraud estimated to involve more than Rs 400 crore, Delhi Police arrested a 52-year-old senior accounts officer of the Indian Railways for allegedly siphoning off money contributed by 65,000 employees for a Life Insurance Corporation (LIC) policy as part of a group insurance scheme. Police said the contributing employees were kept in the dark even as the cooperative society collected Rs 32.5 lakh from them every month and ran their own insurance scheme, even paying off claims.
The police have now roped in auditors to assess the cooperative society accounts to understand the amounts involved and what was done with the money. The fraud was reportedly going on for the past 10 years from Baroda House and investigators say more arrests are likely. Another employee who headed the cooperative society is already under scanner and some LIC employees could also be involved, police said.
The first accused, Ajay Bhatnagar, was arrested by the Tilak Marg police recently after it was revealed that he, as member of the elected body of the cooperative society, took a whopping Rs 1.2 crore as commission from LIC for another employees' policy. The commission was collected in the name of Bhatnagar wife and sister-in-law.
It all started in 1998 when the Northern Zone Railway Employees Cooperative and Thrift Credit Society Limited (NZRECTC Ltd) decided to launch an LIC scheme for its members. As per the scheme, each member had to contribute Rs 50 per month against which were to be allotted an LIC policy. The society paid Rs 32.5 lakh per month as joint policy premium and it was agreed with LIC that there will be no commission for the premium.
The society took two LIC policies. The first (policy No. OGI-311434) with a premium of Rs 32 lakh per month for all members was opened at the KG Marg branch of LIC. The other scheme ^ individual policies for 35,663 members - was started at Wazirpur branch.
The first policy lapsed in 2002 due to non-payment and LIC informed the society about it. The cooperative's governing body did not inform its 65,000 members about the lapse and diverted the amount into the society's account at Allahabad Bank. Initially, Rs 64 lakh was deposited and it was decided among governing body members that the Rs 32.5 lakh collected every month will go into the account. A letter from LIC, asking the society to settle claims from the reserve funds, was also forged.
Meanwhile, Bhatnagar, who was the accounts officer of northern India, made sure that the money from the employees' salaries was deducted every month. ``It was easy for him as he used to handle the accounts of all employees. For the second LIC policy, which is still running, Bhatnagar's wife and sister-in-law were paid Rs 1.2 crore as commission,'' said a senior police officer.
When contacted, Additional CP (New Delhi) Shankar Dash confirmed the arrest and said, ``We have arrested Ajay Bhatnagar for his role in the scam. A case had already been registered and we are investigating the matter. The roles of a dozen railway employees are under the scanner and involvement of some LIC officials cannot be ruled out.'' It has emerged during investigations that fraudsters paid death claims from the reserve funds to nearly 1,200 employees during the period without referring it to LIC. A majority of members were not even aware that the policy had lapsed.
The fraud first came to light when an employee of the Indian railways approached the police in 2006 alleging misappropriations of funds. After this a case under sections 403 (dishonest misappropriation of property), 406 (criminal breach of trust), 408 (criminal breach of trust by a clerk or servant), 409 (criminal breach of trust by a public servant) and 420 (cheating) of Indian Penal code was registered at the Tilak Marg police station.
The investigations into the scam were initiated but no one was arrested as the scamsters managed to avoid detection. Police added that they are questioning other suspects who are employees of northern railways and were responsible for running the society. Police also added that based on these LIC premiums, employees of Indian Railways claimed income tax concessions every month and thus had caused a huge loss to the Income Tax department over 10 years.
NEW DELHI: In a financial fraud estimated to involve more than Rs 400 crore, Delhi Police arrested a 52-year-old senior accounts officer of the Indian Railways for allegedly siphoning off money contributed by 65,000 employees for a Life Insurance Corporation (LIC) policy as part of a group insurance scheme. Police said the contributing employees were kept in the dark even as the cooperative society collected Rs 32.5 lakh from them every month and ran their own insurance scheme, even paying off claims.
The police have now roped in auditors to assess the cooperative society accounts to understand the amounts involved and what was done with the money. The fraud was reportedly going on for the past 10 years from Baroda House and investigators say more arrests are likely. Another employee who headed the cooperative society is already under scanner and some LIC employees could also be involved, police said.
The first accused, Ajay Bhatnagar, was arrested by the Tilak Marg police recently after it was revealed that he, as member of the elected body of the cooperative society, took a whopping Rs 1.2 crore as commission from LIC for another employees' policy. The commission was collected in the name of Bhatnagar wife and sister-in-law.
It all started in 1998 when the Northern Zone Railway Employees Cooperative and Thrift Credit Society Limited (NZRECTC Ltd) decided to launch an LIC scheme for its members. As per the scheme, each member had to contribute Rs 50 per month against which were to be allotted an LIC policy. The society paid Rs 32.5 lakh per month as joint policy premium and it was agreed with LIC that there will be no commission for the premium.
The society took two LIC policies. The first (policy No. OGI-311434) with a premium of Rs 32 lakh per month for all members was opened at the KG Marg branch of LIC. The other scheme ^ individual policies for 35,663 members - was started at Wazirpur branch.
The first policy lapsed in 2002 due to non-payment and LIC informed the society about it. The cooperative's governing body did not inform its 65,000 members about the lapse and diverted the amount into the society's account at Allahabad Bank. Initially, Rs 64 lakh was deposited and it was decided among governing body members that the Rs 32.5 lakh collected every month will go into the account. A letter from LIC, asking the society to settle claims from the reserve funds, was also forged.
Meanwhile, Bhatnagar, who was the accounts officer of northern India, made sure that the money from the employees' salaries was deducted every month. ``It was easy for him as he used to handle the accounts of all employees. For the second LIC policy, which is still running, Bhatnagar's wife and sister-in-law were paid Rs 1.2 crore as commission,'' said a senior police officer.
When contacted, Additional CP (New Delhi) Shankar Dash confirmed the arrest and said, ``We have arrested Ajay Bhatnagar for his role in the scam. A case had already been registered and we are investigating the matter. The roles of a dozen railway employees are under the scanner and involvement of some LIC officials cannot be ruled out.'' It has emerged during investigations that fraudsters paid death claims from the reserve funds to nearly 1,200 employees during the period without referring it to LIC. A majority of members were not even aware that the policy had lapsed.
The fraud first came to light when an employee of the Indian railways approached the police in 2006 alleging misappropriations of funds. After this a case under sections 403 (dishonest misappropriation of property), 406 (criminal breach of trust), 408 (criminal breach of trust by a clerk or servant), 409 (criminal breach of trust by a public servant) and 420 (cheating) of Indian Penal code was registered at the Tilak Marg police station.
The investigations into the scam were initiated but no one was arrested as the scamsters managed to avoid detection. Police added that they are questioning other suspects who are employees of northern railways and were responsible for running the society. Police also added that based on these LIC premiums, employees of Indian Railways claimed income tax concessions every month and thus had caused a huge loss to the Income Tax department over 10 years.
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