EPFO fraud: Rs 21 Crore siphoned from Mumbai PF Office through illegal withdrawals
EPFO fraud: A 37-year-old clerk at EPFO’s Kandivali office, Chandan Kumar Sinha, was the mastermind behind the scam.
KEY HIGHLIGHTS
- As many as 817 bank accounts, mostly of migrant workers, were used to fraudulently claim PF deposits of Rs 21.5 crore on their behalf.
- An internal investigation of EPFO found that 90% of the money claimed by the nexus of employees has already been taken
- out of their accounts
Sinha is currently absconding and is among the five employees of the office who have been placed under suspension
New Delhi: A group of employees at a Mumbai office of the Employees Provident Fund Organisation (EPFO) has allegedly siphoned off over Rs 21 crore from a common PF pool through illegal withdrawals, the Indian Express (IE) reported today.
According to the IE report, a 37-year-old clerk at EPFO’s Kandivali office, Chandan Kumar Sinha, was the mastermind behind the scam. He allegedly used as many as 817 bank accounts, mostly of migrant workers, to fraudulently claim PF deposits of Rs 21.5 crore on their behalf.
An internal investigation of EPFO found that 90% of the money claimed by the nexus of employees has already been taken out of their accounts, the IE mentioned in the report citing sources, who added that the case will be transferred to the CBI as soon as the internal audit is complete.
Sinha is currently absconding and is among the five employees of the office who have been placed under suspension for their alleged involvement in the multi-crore scam.
The money that was withdrawn by the nexus belonged to the pooled fund of EPFO, which holds deposits made by registered organizations every month. The funds received in these pools are usually invested in government securities.
EPFO fraud: Rs 21 Crore siphoned from Mumbai PF Office through illegal withdrawals – Exploited key loopholes
“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,” the publication quoted a senior EPFO official as saying.
EPFO officials believe that the nexus managed to evade scrutiny between March 2021 and June 2021 as this was the time when the organization had relaxed its norms and assigned multiple roles to employees involved in verification and approval to manage the high volume of withdrawals amid job losses and pay cuts due to the COVID-19 pandemic.
Also, they exploited key loopholes in the system using passwords and other access provided to them by senior officials who were working from home during the lockdown.
The internal probe done by EPFO 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 them later. This is negligence,” another senior official told the daily.
After the fraud was discovered, EPFO has written to banks for freezing the 817 bank accounts that received the fraudulent withdrawals. A little over Rs 2 crore has been tracked and recovered so far, the IE report mentioned.
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