Vadakanchery Municipal Councillor P R Arivandakshan is the first CPI-M leader to be taken into custody in connection with the scam.
The Enforcement Directorate (ED) has conducted raids across 22 locations in six districts of Uttar Pradesh in connection with “fraudulent” availment of post-matriculation scholarships by various educational institutes across the state, according to an official statement.
Several institutes/colleges “unlawfully” availed scholarships in the names of several ineligible candidates and “misappropriated” the same for their use, the ED said.
The scholarship is provided by the central and state governments to facilitate the education of SC, ST, PH (physically handicapped or differently-abled) candidates, and students from minority communities and economically weaker sections. Therefore, the scholarship scam has a huge social impact on the weaker sections of society, the ED said.
The entire scam was operated with the active aid and assistance of several agents of FINO Payment Bank and involves nearly 75 crore rupees, it said.
The scam was committed by misuse of the relaxed procedure adopted for account opening on the platform of FINO Payment Bank. The offenders had opened all bank accounts in the Lucknow and Mumbai branches of FINO.
The institutes also availed the services of the FINO agents in both electronic transfers and cash withdrawals of the scholarship funds. Then the proceeds of crime were rotated to various bank accounts under the control of the owners of the institutes and their related entities & persons, the ED said in a press release.
As per the rule, the scholarship amounts are required to be credited directly to the students’ bank accounts. But, the defaulting institutes bye-passed the rules and arranged to take direct possession of the account kits from the agents of FINO bank, the ED said.
Further, with active aid and assistance of FINO agents, institutes arranged to take undated, pre-signed blank chequebooks of these accounts in their custody and misappropriated scholarship funds in accordance with their wishes. In some cases, the institutes and their employees even managed to illegally receive and use the IDs and passwords originally issued to the FINO bank agents by the bank and also managed to operate Micro ATM issued by bank in the institute’s premises, it said.
The scholarship amount was withdrawn by the institutes in cash from students’ accounts and used the same. During ED searches on February 16, a huge number of SIM cards and stamps, and seals of various entities were found and seized. Investigations conducted so far revealed that the institutes/ colleges were prima facie involved in the forgery and fabrication of various documents.
During the course of the search, various incriminating evidence and records related to money laundering in the names of suspected persons, members of their families and their associates have been found and seized under relevant provisions of PMLA, 2002. Cash worth Rs 36.51 lakh and foreign currency of USD 956 were also found and seized during searches, it said.