Two persons, including a junior accountant of a government sub-treasury, were arrested here Friday for alleged misappropriation of more than Rs 1.4 crore government funds by fraudulent transfer into the accounts of a few pensioners, police said.
A hunt had been launched for three more people allegedly involved in the fraud, they said.
Police said they have recovered Rs 76.15 lakh, including Rs 64.54 lakh in cash, from the duo.
The arrested have been identified as junior accountant Y Venkata Narasinga Rao of Seethammadhara sub-treasury office here and his friend Garikina Santhosh Kumar, both natives of the city.
Deputy Commissioner of Police M Ravindranath Babu said Narasinga Rao had stolen user IDs and passwords of his colleagues at the sub-treasury office and fraudulently credited a total of Rs.50.66 lakh into the bank account of his mother Varalakshmi, a pensioner, in two transactions in May and August this year citing them as pension arrears.
He had also transferred funds into the account of his friend's father.
The fraud came to light during random verification by Assistant Treasury Officer K S Venkateswara Rao, who then lodged a complaint with police last month.
Similarly, another complaint was lodged by Assistant Treasury Officer (In-Charge) V L Subhashini that bank accounts of two other pensioners had been credited with Rs 54 lakh and Rs 19 lakh respectively.
Police after investigation arrested Narasinga Rao, the mastermind behind the fraud, and his friend.
We have recovered Rs.64.54 lakh in cash and Rs.11.61 lakh in bank deposits besides a car and a bike from Narasinga Rao and Santhosh Kumar, the DCP said.
As the pensioners who received the excess money did not inform the treasury officials, cases had been registered against them also and further investigation was on to recover the remaining siphoned-off money, he added.
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