ED arrests 4 in Bihar cooperative bank fraud case

Four persons, including a former CEO, were arrested by the Enforcement Directorate in connection with a money laundering investigation linked to alleged embezzlement of funds at a Bihar cooperative bank, which is promoted by an RJD MLA, official sources said here on Sunday.

Two days ago, the agency raided mutiple locations in Bihar, West Bengal, UP and Delhi, as part of its probe into an alleged Rs 85 crore fraud involving the Vaishali Shahri Vikas Co-operative Bank Ltd.

The arrested accused, identified as Vipin Tiwari, his father-in-law Ram Babu Shandilya, Nitin Mehra and Sandeep Singh, were produced before a PMLA court and remanded in judicial custody.

According to an official, Rashtriya Janata Dal (RJD) leader and former Bihar minister Alok Kumar Mehta is among the promoters of the bank, apart from some other linked entities.

The money laundering investigation stems from some state police FIRs filed against the bank and its office-bearers for alleged embezzlement of funds worth about Rs 85 crore. The alleged fraud was committed through an estimated 400 loan accounts and disbursal of funds was done based on "fake or forged" warehouse receipts.

The bank employees and other private persons, who are alleged beneficiaries of the proceeds of crime and allegedly worked in connivance with Mehta and his associates, are also covered in the search operations, the sources said. The RBI had carried out a verification of the bank and identified the alleged diversion of funds.

Meanwhile, the RJD has slammed the BJP-led Central Government over the ED action and accused it of deliberately targetting the opposition parties by using probe agencies like ED, CBI and IT as a political tool.