A web of deceit spanning four years has unraveled in Mizoram, exposing a staggering Rs 150 crore loan fraud perpetrated by a former employee of a private non-banking financial company.
The elaborate scheme relied on a phantom army of "ghost customers" and a meticulously crafted illusion to siphon off funds meant for vehicle loans.
The mastermind behind the scam, Jakir Hussain, who served as the area business manager for Mahindra & Mahindra Financial Services Ltd (MMFSL) in Mizoram, exploited weaknesses in the company's loan approval process.
In a brazen act, Hussain, along with his accomplices, Edenthara and Lalthankima, allegedly created over 2,000 fictitious loan applications. To legitimize these applications, they fabricated supporting documents, breathing life into these phantom customers.
The ill-gotten gains, however, were not used to finance the purchase of real vehicles. Instead, authorities believe the accused diverted these funds for personal gain.
Instead of delivering cars to non-existent borrowers, Hussain and his associates allegedly channelled the loaned money into a fraudulent bank account. This account, cunningly named "Mahindra Finance Limited," was created at the Khatla branch of Mizoram Rural Bank using forged documents.
Hussain, playing the role of a high-ranking official within MMFSL, reportedly deceived bank personnel to facilitate the creation of this bogus account. To maintain the facade of normalcy, the perpetrators ensured regular payments from the fraudulent account towards the fake loans.
This strategy kept the loans from being classified as non-performing assets, a red flag that would have undoubtedly triggered an investigation.
Police suspect that whenever audits loomed, Hussain would remove the fabricated loan files from the MMFSL office and conceal them at the residence of another accomplice, Sunar.
Investigators believe this elaborate scheme thrived due to alleged loopholes within MMFSL's oversight mechanisms.
According to Mizoram DGP Anil Shukla, the accused exploited weaknesses in "KYC verification process, auditing, tele-verification, and supervisory mechanism" to perpetuate the fraud for an extended period.
The house of cards began to crumble in March 2024 when MMFSL officials raised suspicions about financial irregularities. A formal complaint was lodged with the Aizawl police station against Hussain, initiating a probe that would expose the depth of the scam.
Authorities subsequently registered two separate cases against Hussain and his accomplices under various sections of the Indian Penal Code (IPC) pertaining to criminal breach of trust, forgery, cheating, and criminal conspiracy.
Swift action by Mizoram Police led to the arrest of 11 individuals, including Hussain, Edenthara, Lalthankima, and Sunar. Police investigations revealed a trove of incriminating evidence, including seven sacks containing fabricated loan files, forged stamps, laptops, mobile phones, and SIM cards used to maintain the illusion of real customers.
The investigation also shed light on the potential involvement of five local car dealers – Rafael Nissan, AIDU Motors, National Business Executive, CK Cars, and Standard Motors.
These dealers are suspected of receiving and selling vehicles purchased with fraudulently obtained loans at discounted prices.
Authorities have managed to recover a portion of the stolen funds. Car dealers have reportedly returned Rs 3.47 crore directly to MMFSL, and police have frozen 26 bank accounts containing Rs 2.5 crore linked to the fraudulent activity.
Additionally, 15 vehicles, estimated to be worth over Rs 3 crore, have been seized.
Follow us
