In a precedent-setting partnership with ED, Bihar’s Economic Offence Unit follows the money trail, confiscates properties of criminals and corrupt officers to deter white-collar crimes
Pankaj Kumar | October 7, 2013
Jayashree Thakur, additional district magistrate (ADM) of Bhagalpur in Bihar, should not have been shocked and surprised after all. In July, the economic offence unit (EOU) of Bihar police raided her home and unearthed assets worth more than '20 crore, mostly in bank deposits and jewellery. The sleuths also found documents of 17 plots of land worth '1.66 crore in various parts of the state in the names of the officer’s relatives. They also found that when Thakur served as land acquisition officer in Banka district, she ran a small racket, buying off those plots which her own department was to later acquire.
Uma Shankar Ram, posted in Motihari as director of National Employment Programme (NEP), too came under the EOU scanner. When four EOU teams conducted raids on his office and residences in Motihari, Muzaffarpur, and Patna, they found assets worth '3.4 crore and documents of several properties he had bought for himself and also in the name of his father Ayodhya Ram and his wife.
Three district transport officers, a district agriculture officer and a district education officer have also been the targets of EOU. They all are among the 39 government officers booked by EOU this year – and the number is up from 32 of last year. Of these 39, 23 face charges of disproportionate assets, or corruption in other words.
Their counterparts in other states are lucky. Going after corrupt government officials would be the job of the enforcement directorate (ED), which has limited resources at state level. In Bihar, however, the dedicated wing of police goes after them, and hands over the case to ED, which then registers enforcement case information report (ECIR).
“Bihar is the first state where ED is being helped by the police. We have frequent exchange of information between us, and EOU assists us to get offenders booked by giving complete details of their black money and illegal property,” says a senior ED officer.
This novel method of catching crooks is another innovation from the Nitish Kumar government. Nitish often talks of the state’s transition he has overseen as the one from utter lack of governance to good governance, and this change also reflects in the new anti-corruption regime with innovative ways.
New anti-corruption regime
Gone are the days when corrupt officials flaunted their success with their grand bungalows and other symbols of pecuniary power. Those days, even if a case was made out against one of them, legal loopholes meant that their property – the fruits of crime – would remain untouched. But in 2009 the state government armed itself with a new law, Bihar Special Courts Act, which provides for confiscation of property of corrupt officials and public representatives.
The Bihar police complemented the move by establishing a special force that has been trained to not only confiscate property of the corrupt civil servants but also act against mafias. The economic offence unit (EOU) was formed in December 2011 as part of the crime investigation department (CID). When the state government realised the need to form a dedicated wing to check corruption and financial crimes, EOU came up as a separate unit.
In 2009, the vigilance department of Bihar police, the predecessor of EOU, confiscated a DGP-rank officer’s bungalow, which was turned into a school for the physically challenged. Former IAS officer SS Verma and former treasury officer Girish Kumar too have seen their palatial residences being converted into schools. The immovable property of Yogendra Prasad Singh, an officer of the Gaya district administration, was also confiscated.
To deal with other criminals, EOU resorts to provisions of the Prevention of Money Laundering Act and attaches their property. Of course, the police does not have the power to lodge cases of money laundering, or attach or confiscate property. At the most, the police can carry out preliminary inquiry to verify the information received from sources — and then recommend the ED to take up the case. The police has thus developed a unique partnership with the ED.
With the help of EOU, the ED has filed several cases against criminals like Ashok Yadav of Samastipur, who has assets worth '33.78 crore, Rajkumar Yadav alias Mantu Yadav (assets: '9.35 crore) and Sanjay Singh of Bhojpur (assets: more than '2 crore) and investigations are on against them. The property of Reet Lal Yadav, a notorious muscleman, is under interim attachment after EOU found out about the assets he has amassed. Though on government records, Reet Lal’s property is worth '1.30 crore, its market value is said to be around '10 crore. Expanding the usual range of economic offences, EOU has targeted a variety of crimes that finally lead to generation of black money – including human trafficking, prostitution, arms smuggling apart from forgeries.
For more efficiency, Bihar now wants the police to have the power to take up cases under the Prevention of Money Laundering Act. The finance ministry, according to top sources in Bihar police, has agreed in principle to the state’s proposal. A formal decision will make Bihar the first state in the country to empower the police to investigating money laundering offences.
How did these changes come about? How did the state police, once known to be protecting criminals, become so proactive?
“Credit for EOU’s work goes to DGP Abhayanand, who emphasises on confiscating property earned by illegal means. Obviously, the government has the political will to check corruption, and hence this unit was formed,” said a senior IPS officer not wishing to be named.
(Also see Striking at the root cause of crime http://governancenow.com/views/interview/striking-root-cause-crime )
Abhayanand, who took over as the state police chief in 2011, made special efforts to make EOU more effective. For example, since probing financial crimes requires special skills, he arranged for the training of 80 officers – from sub-inspectors to superintendents of police – by the central bureau of investigation (CBI) between January 2012 and March 2013.
The result is a dynamic organisation focused on delivering. EOU was applauded when it acted against DIG Alok Kumar, an influential IPS officer accused of demanding '10 crore in extortion from a liquor merchant.
After thorough investigation, EOU submitted the charge sheet, prompting the Bihar government to give sanction to prosecute him even though the central government’s sanction is awaited (since IPS is an all-India service).
Innovation in law enforcement
Given the insufficient provisions of law, and criminals’ tendency to find loopholes in them, EOU comes up with creative ways of nabbing criminals using the available laws – just as it partners with ED for money laundering cases, it has found a way to deal with misappropriation of funds. It books culprits under the ‘criminal law amendment ordinance’ of 1944 vintage. “We have used this law against several people who misappropriated government money. We succeeded in getting interim attachment of property in nine cases and filed in 26 other cases in the court where we are hopeful of (getting) interim attachment of property,” Abhayanand said.
Two people against whom interim attachment orders were given are Rudranand Jha and Balmukund Chaudhary, who are accused of misappropriating funds of various government welfare schemes to the tune of Rs 30 crore and used the money to purchase land.
“They caused losses of '30 crore to the government and as per this law we can attach even inherited property to compensate the losses,” said inspector general of police (operations) Amit Kumar.
Using this old ordinance, EOU went after seven illegal liquor manufactures in Muzaffarpur and the court has ordered attachment of their property.
EOU has shown its competence in other areas as well – it exposed a racket of counterfeit notes circulating in West Bengal and Bihar by discovering fake notes with notional value of '56 lakh from Begusarai, Madhubani and Motihari.
The unit has also acted against mining mafias in Nawada, Rohtas, Gaya and Sheikhpura in Bihar. Of 15 cases of illegal mining the unit has taken up, charge sheets have been submitted in 12 cases.
“There is no clear demarcation of cases yet in Bihar as the government, DGP or I decide if a case will be taken up by EOU or not,” said Praveen Vashishtha, inspector general of police who heads the unit.
Confiscating property has come handy to counter Maoists, too, who are active in 19 of the state’s 38 districts, by using the Unlawful Activities (Prevention) Act (UAPA). “Till now properties of nine persons have been confiscated under UAPA and three more cases are pending due to some departmental procedure,” Amit Kumar said.
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