Multi-crore cheque forgery racket busted

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Multi crore cheque forgery racket bustedKOLKATA: After investigating for three months, Kolkata Police detectives have blown the lid off an inter-state gang that meticulously forged cheques of nationalized banks — complete with all embedded security features — to steal money from government accounts, including the National Rural Health Mission. Forteen people have been arrested and the money stolen could amount to several crores.

The swindlers chose traditional methods to take advantage of the loopholes of the RBI-mandated Cheque Truncated System or CTS that has been in vogue since 2014. Under this new system, to expedite the process of cheque clearance, high-resolution scanned images are sent to banks for signature verification and other checks. The physical verification of the cheque is limited to the teller at the bank where the cheque is presented and the depositor has an account. This has replaced physical clearing of cheques, which often took several days.

This gang, with footprints in Bihar, Uttar Pradesh and West Bengal, first opened fictitious bank accounts, mostly with private banks. They then tracked down accounts to be targeted — for example Titagarh Wagons, CQA (MET) Ishapore PF and even PN Das College in Palta — by getting hold of an actual cheque. The photocopied it for specific details — cheque number, signatory, account number and branch details. According to police, then they procured a cheque book of the bank and manipulated the cheques. The details were scratched out to be replaced by the details obtained fraudulently.

Using modern software like Photoshop and CorelDRAW, and even the traditional tracing paper, each cheque was forged by trained hands which took hours to complete. The forged cheque was then presented in the private banks where they held their accounts. Even though the cheques had forged cheque numbers, MICR code, branch name and transaction code, they passed the UV light verification. The bank sent the scanned images of the cheque to the clearing bank (which held the account). Almost all cheques were cleared. With the physical verification not being done by the clearing bank, any remote chance of detecting any anomaly in the forged cheques was eleminiated.

While many nationalized banks — including SBI, Canara Bank, PNB, Central Bank and Bank of India (which are mostly used by government agencies) — fell prey to the gang, it was an SBI complaint on August 26, 2014, at Shakespeare Sarani police station regarding a Rs 32.30-lakh loss that led to the probe. Of the 14 arrested, 10 have been remanded in police custody till March 2 and the rest till March 7. On Sunday, a crack team from the Anti-Bank Fraud section trapped four persons in Patna. Among the four is a BCom and a BCA graduate. The quartet hails from Patna, Aurangabad and Madhubani.

Pallab Kanti Ghosh, special additional CP (Crime), said, “The gang appears to be well entrenched across several states and got cheque information of different business units, educational institutes and individuals. Further investigation is on.”

The investigation, senior officers said, has also exposed the chinks in the CTS 2010-enabled cheques. “Forget the embedded security features, everything could be replicated. It’s time banks did something about the parts of the cheque where the account number and the cheque number are mentioned. The security codes have to be embedded there first. Otherwise, the discrepancies are so minute, they aren’t visible under the UV light apparatus commonly used,” an officer said.

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