Illustration by Sandemo Ngullie
How to get away with a Rs. 100 plus crore pension fraud in Nagaland – PART I
Morung Express News
Kohima | October 30
In June and July this year, an investigation into the disclosure of suspected irregularities in the State’s annual sum of pension payments led to the arrest of five people in Zunheboto.
The perpetrators in the alleged financial fraud, amounting to crores of rupees, included two officials from the Treasuries & Accounts office, a bank employee, a pensioner and a gaonbura.
The case unravelled when the Accountant General (AG) of Nagaland State detected an unusual surge in the yearly pension statement of Nagaland State by over Rs. 200 crore from the previous year during its annual audit. As per the AG’s findings, the pension expenses for the State had jumped to a whopping Rs. 905.15 crore in 2014-15 from Rs. 695.10 crore during 2013-14.
Alarmed by the unprecedented variation, the auditors initially alerted the Treasuries and Accounts Directorate. Upon inspection, the anomalies pointed to the Zunheboto district Treasury & Accounts Office where a verification exercise was reportedly conducted without any substantial result.
Consequently, the AG filed four separate FIRs at the State Crime Police Station, PHQ, Kohima in April 2016. The FIRs were related to drawal of gratuity, commutation of pension and pension arrears using forged documents; drawal of pension using fake pension payment order; drawal of pension arrears using fake pension revision authorizations; and lastly, multiple drawal of pension against same Pension Payment Order (PPO).
A three-member Special Investigation Team (SIT) was thereafter formed to probe the suspected scam. The trail led to Zunheboto, where on June 10, 2016, the SIT conducted searches at both the district’s Treasury office and at the district’s State Bank of India main office.
Subsequently, on June 11, the SIT arrested two people – a bank employee and a pensioner – in Zunheboto. Interrogation of the two resulted in the arrest of another – a Gaonbura (GB) suspected to be the prime accused – on June 15. Two more people – a Senior Treasury officer and a Sub-Treasury officer- were later arrested on July 11.
As per a PHQ source, the five clandestinely organised the scam, with the GB acting as the ‘middleman,’ alleged to have arranged for fake pension papers. The bank employee was allegedly paid Rs. 1 lakh for each transaction.
Conservative estimates suggest that the monetary rip-off would amount to over Rs. 100 crore. Another official source disclosed that in 2014-15 some 450 new (and genuine) pensioners were added to the State’s pensioners’ list. This amounts to expenses of roughly Rs. 100 crore to the exchequer, with the remaining, around Rs. 110 crore that showed up in the AG’s audit attributed to the alleged fraud. Auditors though are yet to put an appropriate figure to the scam.
The modus operandi
Drawal of Pension gratuity, commutation and arrears using forged documents
Documents made available to The Morung Express show that an amount of Rs. 1.26 crore was withdrawn as pension gratuity, commutation and pension arrears using forged documents under Zunheboto Treasury. In its FIR, the AG stated that in the forged document, the accused printed out the discontinued nomenclature of the AG - ‘Office of the Senior Deputy Accountant General (A&E)’ - in its heading instead of the current ‘Office of the Accountant General (A&E)’. Further the word ‘The Trasury Officer’ was used instead of ‘The Treasury Officer’ in the intimation letter for PPO. The authorization seal of the AG also includes Hindi; errors were detected in the Hindi letters in the forged copy. 13 copies of such forged documents detected by the AG have been further sent for laboratory analysis, the source informed.
Drawal of pension using fake PPO
As per the AG findings, in December 2014, Rs. 14.15 lakh was drawn in Zunheboto using 85 PPOs of pensioners across the 11 districts. While PPO numbers were of legitimate pensioners, the amounts were withdrawn after changing the recipients’ names with fake ones. These drawals also included signatures of District Administrators. “What the accused has done is take these numbers and give names and withdraw. There were prepared pensions for those who are still in service,” added the source.
Multiple drawal of pension against same PPO
The documents further reveal illegal multiple drawal of pensions where the alleged fraudsters had drawn money by using the name of pensioners from all the districts in Nagaland. These amounts were withdrawn multiple times with the same pensioner’s name and number without the owner’s knowledge. Out of 4799 PPO numbers, 2486 PPOs were used for multiple withdrawals from 2013 to 2016 out of which an amount of Rs. 4.12 crore was fraudulently withdrawn.
Drawal of pension arrears using fake pension revision authorizations
Another document (Annexure C) indicated fraudulent drawal of Revision of Pension (RoP) with forged authorities under Zunheboto Treasury amounting to Rs. 31.16 lakh.
During its audit, the AG found out that the Pension branch of the Office of the Accountant General (A & E), Nagaland issued Revision of Pension Authorities to the Zunheboto Treasury, which was received by the Senior Treasury Officer, Zunheboto.
However, it was noticed that against the same authorities, pension arrears was allowed on many occasions. Further examination revealed that these arrears were drawn in the form of personal copies issued to the pensioner concerned, and such exercise were undertaken more than once on the basis of personal copies.
“In some instance, the Sr. Treasury officer Zunheboto issued letter to the Chief Manager SBI, Zunheboto to disburse pension fraudulently in cash against ‘Not for Payment’ copies. Further, personal copies were always stamped ‘Not for Payment’ and were issued as carbon copies of the originals. However, the same documents were original hand written documents and did not bear the stamp ‘Not For payment’ which indicated the deliberate attempt to fabricate official documents issued by the office and withdrew money from the government account,” stated the AG in its FIR.
Investigation so far
Six months on, investigation is ongoing pending filing of charges against the five. As per the PHQ source, papers confiscated during the investigation were sent for expert analysis and charge sheets will be filed upon its arrival. It was informed that the Treasuries & Accounts department suspended its two officials arrested by the SIT, while further action can be taken only after the investigation is completed. The Principal Director of Treasuries and Accounts could not be reached despite several attempts. While the current investigation pertains only to Zunheboto, the sources further pointed to the possibilities of such malpractices in other districts.
