Fraud case to be handled by CBI

By Sujay Mehdudia

NEW DELHI, AUG. 20. The Income Tax Department is all set to hand over to the Central Bureau of Investigation (CBI) the probe into the Rs. 100 crore bank fraud by a businessman dealing in milk products, who has since fled the country. The involvement of some bank officials in the case is not ruled out.

The businessman, S.K.Bagaria, raised money from the public and made bogus purchases of plant machinery and various other products and defrauded nationalised banks by submitting forged documents and cheques.

The Income Tax authorities, who detected it after prolonged investigations, have not been able to trace Bagaria, who after getting a hint that the lid had been blow off, is reported to have fled the country. ``As the Department does not have the mechanism to trace absconding people abroad, it is likely the CBI will be asked to take over investigations,'' a senior official remarked.

It was meticulous investigation by tax sleuths that led to unearthing of this big fraud. The Department had raided a firm Vishal Lacto owned by Bagaria for tax evasion and concealed income. However, it was only after thorough scrutiny of documents and elaborate investigations that the tax sleuths came across evidence suggesting that there was something big.

A close examination of documents and the contacts of Bagaria led them to believe that the case was not simple. It was detected during investigations that Bagaria had taken as loan amounts ranging from Rs. 10 crores to Rs.25 crores from various banks for purchase of plant machinery and other products. After availing of the loan, he showed that the plant machinery had been purchased for which ``bogus cheques and documents'' were shown to back the financial transaction. Some officials of banks, who have remained tight-lipped, are learnt to have helped Bagaria in the fraud.

Suspecting the transactions, the tax sleuths accosted the owner of the firm from whom the machinery had been allegedly purchased. Initially, denying his involvement, he later confessed that he acted as a front man for Bagaria who had opened a number of bank accounts in his name. This way, Bagaria would get the cheques signed and after making the payment would later withdraw the amounts from benami accounts.

Bagaria would get all the cheques signed from the owner of the firm in advance and keep them with himself. A Rs. 8 crore payment was detected to a party in Faridabad which never existed. In fact, nearly 70 per cent of the firms to whom it was shown that payments had been made for purchase of products, turned out to be fraudulent.

After he was raided some weeks ago, Bagaria got suspicious that his game would soon be over. Sensing that he was in big trouble, Bagaria is reported to have fled the country.

However, what is surprising is that despite having been defrauded of huge sums, the banks have preferred to remain quiet without initiating any action.

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