ED has seized cash of Rs. 36.51 lacs and foreign currency of $ 956, during search operation in connection with PMLA case of Rs. 75 crore Scholarship scam in UP , in connivance with FINO Bank agents.
On 16/02/2023, the Enforcement Directorate (ED) conducted a search and seizure operation under Section 17 of the PMLA, 2002 at 22 locations in 6 districts of Uttar Pradesh (UP), in connection with the fraudulent availment of Post-matriculation Scholarship Scheme by various educational institutions.
These institutions include the SS Institute of Management Mampur Lucknow, the Hygia College of Pharmacy Lucknow, the Hygia Institute of Pharmacy Lucknow, the Central Institute of Pharmacy Lucknow, the Lucknow Institute of Management and Education Lucknow, the Dr. Om Prakash Gupta Institute of Management and Technology, Farrukhabad, the Dr. Bhim Rao Ambedkar Foundation Hardoi, the Jivika College of Pharmacy Hardoi, the RP Inter College Bhatai Hardoi, the Gyanwati Inter College Terwa Madhoganj Hardoi, and the Jagdish Prasad Verma Uchatar Madhyamik Vidyalaya Gaushganj Kachauna Hardoi.
Mr. IH Jafri controls and manages the Hygia group of colleges, while Shivam Gupta controls and manages the OP Gupta Institute, Praveen Kumar Chauhan controls and manages the SS Institute, and Ram Gupta controls and manages Jivika College.
The Central and State Governments offer a variety of scholarships to candidates from Scheduled Castes (SC), Scheduled Tribes (ST), and Physically Handicapped (PH) categories. Furthermore, some scholarships are intended for minority candidates and students from Economically Weaker Societies (EWS). As a result, the scholarship scam has a significant social impact on the underprivileged and weaker sections of society.
The ED’s recent search operations are related to the scholarships scam in the schemes that can be accessed by students of various categories only for post-matric courses. The aforementioned institutes/colleges obtained these scholarships illegally in the names of several ineligible candidates and illegally misappropriated them for their own use.
The ED investigations also revealed the active involvement of several agents, including one Ravi Prakash Gupta. The entire scheme was carried out with the active participation and assistance of several FINO Payment Bank agents, including Mohd. Sahil Aziz, Amit Kumar Maurya, Tanveer Ahmad, and Jitendra Singh.
The scam was carried out by abusing the lenient procedure for opening accounts on the FINO Payment Bank platform. The offenders had opened bank accounts at the FINO branches in Lucknow and Mumbai. The institutes also used the FINO agents for electronic transfers and cash withdrawals of scholarship funds. The proceeds of crime were then transferred to various bank accounts under the control of the institutes’ owners and related entities and individuals.
According to an ED investigation, in order to obtain more and more scholarship funds, these colleges and institutes used bank accounts of minor children aged 7 to 12 years old, as well as people aged 45 and up. So far, investigations have revealed that these institutes opened approximately 3000 such accounts using various people’s documents. The majority of the accounts are in the names of ordinary villagers who are unaware of these bank accounts and have never received any scholarships.
Scholarship funds must be deposited directly into students’ bank accounts, according to the rules. However, the defaulting institutes circumvented the rules and arranged to take direct possession of the account kits from FINO bank agents.
Furthermore, with the active help and assistance of FINO agents, institutes arranged to take undated, pre-signed blank cheque books from these accounts and misappropriate scholarship funds in accordance with their wishes. In some cases, institutes and their employees were able to illegally obtain and use the IDs and passwords originally issued to FINO bank agents by the bank, as well as operate a Micro ATM issued by the bank within the institute’s premises. The institutes took the scholarship money out of students’ accounts in cash and used it.
During ED searches, a large number of SIM cards, stamps, and seals from various entities were discovered and confiscated. So far, investigations have revealed that the institutes/colleges were primarily involved in the forgery and fabrication of various documents. Various incriminating evidences and records related to money laundering in the names of suspected persons, members of their families, and associates were discovered and seized during the course of the search under relevant provisions of the PMLA, 2002.
The scholarship scam is likely to involve criminal proceeds totaling more than Rs. 75 crore (approx.).
The ED is investigating the scholarship scam in UP further.
