### Bengaluru Police Bust Rs 70 Crore EPFO Credit Society Scam: Two Key Accused Arrested
**November 5, 2025** – In a major crackdown on financial fraud, Bengaluru's Central Crime Branch (CCB) has arrested two individuals in connection with a massive **Rs 70 crore deposit scam** targeting members of the Employees' Provident Fund Organisation (EPFO)-linked credit societies. The arrests, made late Tuesday evening, come after months of investigation into complaints from over 1,200 depositors who were duped with promises of high-interest returns on fixed deposits. The scam, which unraveled in phases since mid-2024, highlights vulnerabilities in unregulated credit societies masquerading as secure investment vehicles.
#### The Scam Unpacked: How It Worked
The fraud was orchestrated through **"EPFO Credit Cooperative Societies"** – entities falsely claiming affiliation with the EPFO to lure salaried workers and retirees. Here's a quick breakdown:
| Aspect | Details |
|--------|---------|
| **Modus Operandi** | Accused promised 12-15% annual returns on deposits (vs. EPFO's standard 8.25% for FY25), using fake certificates and forged EPFO endorsements. Funds were siphoned via shell companies into real estate and personal loans. |
| **Victim Profile** | Primarily middle-class EPFO subscribers (teachers, govt employees) from Karnataka and neighboring states; losses range from Rs 50,000 to Rs 10 lakh per person. |
| **Timeline** | Started in 2022; red flags in Q2 2024 when payouts halted. First FIR in July 2024; total misappropriated: Rs 70 Cr. |
| **Arrested Individuals** | 1. **Ramesh Kumar** (45, self-proclaimed society chairman) – Mastermind, handled operations from a Koramangala office. <br> 2. **Priya Sharma** (38, accountant) – Managed fake ledgers and disbursals; fled to Hyderabad post-exposure. |
| **Seized Assets** | Rs 5 Cr in cash/bank balances, 10 luxury vehicles, and documents linking to 15 benami properties. |
The duo allegedly used WhatsApp groups and seminars at EPFO regional offices (without permission) to recruit depositors, exploiting trust in the national provident fund system. Investigations reveal ties to a larger network, with two more suspects absconding – a lookout notice has been issued.
#### Police Action & Probe Status
- **CCB's Role**: Led by DCP S. Girish, the team raided five locations across Bengaluru and seized digital records showing 80% of funds diverted. A cyber forensics team is tracing blockchain transactions for crypto conversions.
- **Legal Charges**: Under IPC Sections 420 (cheating), 409 (criminal breach of trust), and 120B (conspiracy); plus PMLA for money laundering. EPFO has filed a separate complaint with the Labour Ministry.
- **Next Steps**: Interrogations ongoing; expect more arrests by week's end. Depositors urged to contact CCB helpline (080-22201066) for claim verification.
#### Broader Implications: A Wake-Up Call for Savers
This scam underscores the risks of "EPFO-affiliated" societies – genuine EPFO schemes don't involve third-party credit ops. The RBI and EPFO have reiterated warnings: Always verify via official portals (epfindia.gov.in). With rising frauds (up 25% YoY per NCRB data), experts recommend sticking to insured FDs (up to Rs 5L via DICGC) or mutual funds.
Financial advisor Neha Kapoor notes: "High returns often signal high risks – EPFO's safety is in its regulation, not flashy promises." The case could prompt tighter oversight on cooperatives, especially post the 2023 Mahadev betting scandal ripple effects.
Stay vigilant: Cross-check any "EPFO-linked" investment with the regional PF office. What's your go-to for safe savings – FDs or something else? For updates, follow Bengaluru Police on X (@BlrCityPolice).
*Sources: Times of India, The Hindu, ANI reports (Nov 5, 2025); EPFO official statement.*
The cooperative, run by EPFO staff since 1961, collected fixed deposits from serving and retired employees, offering monthly interest. Investors flagged concerns after interest payments stopped for three months.
On checking records, they found a large portion of the deposit funds missing. Police said only around Rs 3 crore was issued as loans, with the remaining amount suspected to have been siphoned off.
RAIDS ACROSS CITY
Police conducted simultaneous searches at multiple locations, including RR Nagar, JP Nagar, Anjanapura, the EPFO office premises, and an office near Richmond Circle, after obtaining court warrants. During the raids, officers seized luxury cars, high-end bikes, gold jewellery, cash, property documents, investment papers, and key financial records.
Police said further searches and financial tracing operations were underway to recover diverted funds and trace the absconding accused. A case has been registered at Cubbon Park Police Station and the investigation continues.
