As per reports emerging out of an internal investigation at Employees Provident Fund Organisation (EPFO), a group of employees managed to clear out ₹21 crores from a common provident fund pool through the means of fraudulent withdrawals.
The mastermind of this scam is Chandan Kumar Sinha, a clerk at the EPFO’s Kandivali office. 37-year-old Sinha reportedly used up to 817 bank accounts to illegally claim PF valued at ₹21.5 crores. A majority of these accounts belonged to migrant labourers, a report by The Indian Express said.
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The investigation has revealed that up to 90 per cent of the money transferred to the account holders’ accounts has been withdrawn. Sinha is one of the five employees at the office alleged of the scam. The EPFO will reportedly transfer the case to the Central Bureau of Investigation (CBI) after it concludes the internal investigation.
Although this investigation only looks at the misconduct in the Kandivali office, it has understandably led to concern throughout EPFO.
“No individual PF account has been misused (in the fraud). The money belonged to the pooled fund and it is a loss to EPFO not any individual. It is the equivalent of a bank robbery,” an official was quoted as saying by IE.
The EPFO is now looking to secure all withdrawals while including a larger set of PF claims in its audit covering 12 lakh accounts. The audit will be conducted on withdrawals approved by the Kandivali office between March 2019 and April 2021.
Officials familiar with the matter said that the criminals managed to get away with the crime by exploiting loopholes within the system. This included using passwords provided by their superiors who chose to stay home during the COVID-19 lockdown.
“The probe has found that a few section officers at the branch actively helped Sinha siphon funds. It is a bit embarrassing that some of our officials gave their passwords to him and did not bother to change it later. This is negligence,” a senior official said.
It’s also worth pointing out that the accused struck at a time when the EPFO had eased some of its working norms. During the lockdown, employees were made to handle multiple assignments/roles. The pandemic-induced job losses also contributed to this.
“He knew the audit processes well, and exploited grey areas in the accounting process used by the EPFO to avoid detection,” another official said about Sinha.
It is learnt that the EPFO has already asked banks to freeze 817 bank accounts that collected the withdrawals with around ₹2 crores recovered until now. Moreover, the EPFO is also going to attach the assets of the accused Sinha.
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