In connection with the fraudulent use of the Post-matriculation Scholarship Scheme by a number of educational institutions, including S. S. Institute of Management, Mampur, Lucknow (UP), Hygia College of Pharmacy, Lucknow (UP), Hygia Institute of Pharmacy/Central Institute of Pharmacy, Lucknow (UP), and Lucknow Institute of Management and Education, Directorate of Enforcement (ED) conducted Search & Seizure Action under Section 17 of the PMLA, 2002 on February 16, 2023 at 22 locations (UP). Mr. I.H. Jafri oversees and manages the Hygia network of colleges, whereas Shivam Gupta oversees the O.P. Gupta Institute, Praveen Kumar Chauhan oversees the SS Institute, Ram Gupta oversees Jivika College, and so on.
The Central and State Governments offer a variety of scholarships to help SC, ST, and PH students pay for their studies. Also, certain scholarships are intended for minority applicants and students from economically disadvantaged socioeconomic groups. As a result, the scholarship fraud has a significant negative social impact on society’s poorer groups.
The scholarships for which ED has recently conducted searches are exclusively available to students in a variety of categories enrolled in post-matriculatory studies. These scholarships were fraudulently obtained by the aforementioned universities and institutions in the names of a number of ineligible applicants, who then used them for their own purposes.
Moreover, ED investigations uncovered the active participation of other agents, including one Ravi Prakash Gupta. A number of FINO Payment Bank representatives, including Mohd. Sahil Aziz, Amit Kumar Maurya, Tanveer Ahmad, and Jitendra Singh, actively participated in the operation of the entire scheme. The fraud was carried out by abusing the lenient method for account opening followed on the FINO Payment Bank platform. The bank accounts were opened by the criminals at the FINO offices in Mumbai and Lucknow.
The institutes also used the FINO agents’ services for cash withdrawals and electronic transfers of the scholarship payments. Afterwards the owners of the institutes and the organisations and people connected to them received a rotating distribution of the criminal proceeds to their numerous bank accounts. According to an ED investigation, these colleges and institutions utilised the bank accounts of underage children between the ages of 7 and 12 as well as adults aged 45 and older in order to access more and more scholarship cash.
According to the investigation that has been done thus far, these institutes opened over 3000 of these accounts using different people’s papers. The majority of the accounts are held in the names of unassuming peasants who have never been recipients of scholarships and are not even aware that they have these bank accounts.
As a general rule, the scholarship funds must be credited directly to the students’ bank accounts. Nevertheless, the delinquent institutions circumvented the regulations and made plans to seize the account kits directly from the FINO bank representatives. Moreover, institutes made arrangements to take undated, pre-signed blank cheque books from these accounts under their possession and misappropriate scholarship payments in line with their intentions with the active help and cooperation of FINO agents. In other instances, the institutes and their workers even succeeded in receiving and using the IDs and passwords that the bank had initially given to the FINO bank agents unlawfully. They even operated the bank-issued Micro ATMs inside the institute’s walls.
The institutes took the scholarship money out of the students’ accounts in cash and utilised it. Many SIM cards, stamps, and seals from numerous organisations were discovered and confiscated during ED inspections. Investigations done thus far have shown that the colleges and institutes were, at the very least, involved in fabricating and forging numerous papers. In the course of the search, numerous records and damning evidence pertaining to money laundering in the names of suspects, their family members, and accomplices have been discovered and confiscated in accordance with applicable PMLA, 2002 requirements. During the searches, cash worth Rs. 36.51 lacs and foreign currencies totaling $ 956 were also discovered and seized.
The scholarship fraud probably contains more than Rs. 75 crore (estimated) worth of criminal proceeds. The probe is being expanded upon.
