The Enforcement Directorate (ED) has found that some educational institutes in Uttar Pradesh allegedly misappropriated scholarship funds worth Rs 75 crore meant for economically weaker, minority category and differently-abled students.
The federal probe agency carried out searches at 22 locations in six districts of Uttar Pradesh on February 16 in a money laundering case linked to "fraudulent" availment of post-matriculation scholarships by various educational institutions of the state.
The money laundering case stems from a 2017 complaint of the state vigilance bureau.
In a statement issued on Friday, the ED said that the institutions under its scanner include S S Institute of Management, Mampur, Lucknow; Hygia College of Pharmacy, Lucknow; Hygia Institute of Pharmacy/Central Institute of Pharmacy, Lucknow; Lucknow Institute of Management and Education, Lucknow; and Dr Om Prakash Gupta Institute of Management and Technology, Farrukhabad.
Dr Bhim Rao Ambedkar Foundation and Jivika College of Pharmacy, R P Inter College, Gyanwati Inter College, and Jagdish Prasad Verma Uchatar Madhyamik Vidyalaya, all in Hardoi, are also among the institutions that are being investigated in this case under provisions of the Prevention of Money Laundering Act (PMLA).
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The Hygia group of colleges is controlled and managed by I H Jafri, O P Gupta Institute by Shivam Gupta, S S Institute by Praveen Kumar Chauhan, and Jivika College by Ram Gupta, it said.
The ED alleged that these institutes "unlawfully" availed scholarships in the names of several ineligible candidates and "misappropriated" the funds.
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, the ED said.
"The scholarship scam has a huge social impact on the weaker sections of the society," it said.
Explaining the modus operandi, the ED said the "scam" was committed with the active aid and assistance of several agents of FINO Payments Bank, including Mohd Sahil Aziz, Amit Kumar Maurya, Tanveer Ahmad, Jitendra Singh and Ravi Prakash Gupta.
It was committed by misusing the relaxed procedure adopted for opening accounts on the platform of FINO Payments Bank, the agency said.
"The offenders had opened all bank accounts in Lucknow and Mumbai branches of FINO. The institutes also availed the services of FINO agents in both electronic transfers and cash withdrawal of the scholarship funds.
"The proceeds of crime were rotated to various bank accounts under control of the owners of the institutes and their related entities and persons," the ED alleged.
The probe found that in order to avail more scholarship funds, these colleges and institutes used bank accounts of children (in the age group of 7-12 years) and people in the age group of 45 years and above.
The investigation conducted so far has revealed that these institutes opened around 3,000 such accounts using documents of various people, the ED said.
It was found that most of the accounts are in the name of villagers who are not even aware of them and have never received any scholarships, it said.
While rules stipulate that the scholarship amount has to be credited in the bank accounts of the students, the defaulting institutes bypassed the rules and arranged to take direct possession of the account kits from the agents of FINO Payments Bank.
With the "active assistance" of FINO agents, these institutes arranged to take undated, pre-signed blank chequebooks of these accounts in their custody and "misappropriated" scholarship funds as per their wishes, it said.
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 and also managed to operate micro-ATM issued by the bank in the institute's premises, the ED claimed.
"The scholarship amount was withdrawn by the institutes in cash from students' accounts," it said.
The agency seized a "huge number" of SIM cards, stamps and seals of various entities during the raids apart from Rs 36.51 lakh and USD 956 in cash.
It said the institutes were prima facie involved in "forgery and fabrication" of various documents.
"Proceeds of crime of more than Rs 75 crore (approx) are likely to be involved in the scholarship scam," the ED said.
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