Auditor detained in Syndicate Bank fraud

case

DEVESH K. PANDEY
Almost all the employees of three Rajasthan branches of the Syndicate Bank are
believed to have been part of the conspiracy, hatched allegedly by a chartered
accountant and his associates, to defraud the bank of Rs.1,000 crore.
The overall transaction involved in the entire scam is about Rs. 18,000 crore
according to the Central Bureau of Investigation.
The agency had last week registered a case against five mid-rung managers of the
Syndicate Bank, an Udaipur-based chartered accountant Bharat Bamb and his
associates. The accused had allegedly been cheating the bank in various ways since
2011. The operation was carried out through just two branches in Jaipur and one in
Udaipur.
386 accounts opened
The accused got 386 bank accounts opened for the purpose. While the total amount
cycled or re-cycled by the accused is about Rs.18,000 crore, they siphoned off
Rs.1,000 crore in the process.
We have detained the chartered accountant, who is allegedly the mastermind.
During questioning, he disclosed that he planned to use the same method to cheat
other banks. His associate and builder, Prashant Khandelwal, has also been
detained for interrogation, said a senior CBI official on Thursday.
The CBI has seized Rs.67 lakh in cash and three hard disks from the premises of
Mr. Bambs employee Mahendra Kumar.
The accused had adopted three modus operandi to cheat the bank: discounting fake
cheques, withdrawing money through over-draft facility using forged life insurance
policies and discounting fake inland bills that were raised against letters of credit
shown to have been issued by another bank.
Almost all the employees of three branches may have been complicit in
the scam

http://www.thehindu.com/todays-paper/tp-national/auditor-detained-in-syndicate-bankfraud-case/article8367591.ece

5 Execs, 4 businessmen behind Syndicate Bank

1,000 crore fraud
Press Trust of India | New Delhi March 8, 2016 Last Updated at 20:23 IST

In a scam that can put to shame ace conman Natwarlal, four businessmen
allegedly managed to open 386 accounts in three branches of Syndicate
Bank in Rajasthan in connivance with five of its executives and defrauded it of
Rs 1,000 crore using fake cheques, letter of credits and LIC policies.
The executives and the businessmen have been named in an FIR registered by
the CBI after which it carried out searches today at 10 locations spread in three
cities--Delhi NCR, Jaipur and Udaipur.
CBI registered the case against Satish Kumar Goyal, General Manager (then
posted at Jaipur), Sanjeev Kumar, DGM, Regional Office, Deshraj Meena, Chief
Manager, MI road Branch, Adarsh Manchanda, Malviya Nagar, all in Jaipur and
Avdhesh Tiwari, AGM, Udaipur.
All these officials have been suspended by the Syndicate Bank and a complaint
was filed with CBI on the basis of which the agency has registered the case.
In addition, a Udaipur-based chartered accountant Bharat Bamb,
businessmen Piyush Jain and Vineet Jain from the same city and a Jaipurbased businessman Shankar Khandelwal have also been named in the FIR, the
sources said.
The sources said these businessmen in alleged connivance with the bank
officials resorted to discounting of fake cheques and bills against fake Letters of
Credit and arranging over-draft limit against non-existent LIC Policies.
The scam that allegedly ran through 2011-16 continued unabated escaping the
audits and throwing to the wind all the formalities of KYC norms as 386 bank
accounts of various nature were opened in three branches--Malviya Nagar and
MI Road in Jaipur and Udaipur--of the public sector bank, the sources said.
The sources said it was not possible without the connivance of the bank officials
who turned a 'Nelson's eye' to the crime which continued for five years.

During the course of five years, large numbers of fake cheques, LIC policies and
Letters of Credit issued by different banks were used to avail cash from the
branches of Syndicate bank, the sources said.
They said while opening many accounts documents submitted by genuine
customers of different banks was used to open accounts in Syndicate
Bank which were allegedly controlled by the perpetrators of the scam.
The CBI spokesperson said the transactions of fake cheques ranged from Rs 40
lakh to Rs 5 crore with maximum number of cheques in the range of Rs 2.5
crore to 4 crore.
Explaining the modus operandi, the sources said these people allegedly
deposited fake cheques and get a discounted cash on them (For e.g. for the
face value of Rs 100 cheque, they got Rs 90 cash immediately).
It is alleged that before the cheque bounced, they used to produce another
cheque of higher face value and again get a discounted encashment with a
portion of it used to write off against the previous fake cheque.
"To avoid detection, many of these transactions were nullified from the proceeds
of new fraudulent transactions," the spokesperson said.
The sources said the scam of this magnitude shows systemic loopholes in the
bank's operating system.
They alleged that such a large racket would have been impossible without the
active participation of bank officials at various levels who ignored the massive
scam.
It is not the first time, Syndicate Bank has come under CBI scanner as in 2013
its Chairman cum Managing Director S K Jain was arrested on alleged bribery
charges.
CBI is tight-lipped on questions whether officials at CMD level during 2011-16
had any knowledge about such a scandal.
It was only when Syndicate Bank realised gravity of the issue that the matter
was recently referred to CBI for probe, they said.
http://www.business-standard.com/article/pti-stories/5-execs-4-businessmen-behindsyndicate-bank-1-000-crore-fraud-116030801166_1.html