INDORE: The Enforcement Directorate (ED) has cracked down on a major fake billing scam linked to the Indore Municipal Corporation, arresting alleged mastermind and former assistant engineer Abhay Rathore along with contractors Mohammad Zakir and Rahul Vadera in a ₹92 crore fraud case. The accused were produced before a special PMLA court on Tuesday and sent to ED custody for three days.
According to officials, the investigation has so far revealed strong evidence of financial irregularities worth ₹92 crore in the scam, which first came under scrutiny in 2024. The ED had earlier conducted multiple raids across more than 20 locations and attached 43 immovable properties valued at around ₹34 crore across Madhya Pradesh and Uttar Pradesh.
Systemic Fabrication and Credential Misuse
Investigators said the alleged fraud was carried out through a well-planned system involving fake work orders, forged bills, and manipulation of municipal records. Old infrastructure projects were reportedly shown as new works, and payments were processed using fabricated documents without actual execution of work.
Officials further revealed that login credentials, passwords, and system access of municipal officers were allegedly misused to approve and clear fraudulent payments. Fake files were pushed through administrative channels, and approvals from technical and audit sections were allegedly manipulated to ensure disbursement of funds to contractor-linked accounts.
The probe has particularly focused on the drainage department, where a large portion of the alleged irregularities took place. According to investigators, payment files were generated for works that either never existed or had already been completed years earlier. These projects were then reintroduced as new assignments, allowing fresh billing and payouts.
Drainage Discrepancies and Missing Files
Initial findings suggest that nearly ₹28 crore worth of bills were raised for non-existent work in the drainage segment alone. As the investigation progressed, the scale of the alleged fraud widened significantly, revealing deeper layers of manipulation within municipal records and billing systems.
ED officials also stated that around 186 files were flagged during the initial investigation, and nearly 80 percent of them were found to contain discrepancies or signs of fraud. Among the highlighted cases was a ₹4 crore file related to the trenching ground project, which allegedly involved inflated or fabricated billing entries.
The agency further noted that several official files went missing during the early stages of the investigation, raising concerns about evidence tampering. In documents that were recovered, discrepancies were found in signatures and approvals, with multiple officials denying authentication of the records attributed to them.
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Security Vulnerabilities and Asset Attachments
Investigators also pointed out that the use of original system IDs and passwords by the accused raises serious questions about internal access control within the municipal setup. Authorities are examining how sensitive credentials were allegedly accessed and used to bypass standard approval processes.
The ED has also highlighted that the scam was initially suspected to involve around ₹107 crore, but after detailed verification, the confirmed amount of irregular transactions currently stands at ₹92 crore. Officials believe the final figure may evolve as further financial trails are analyzed.
Abhay Rathore, identified as the alleged mastermind and a former assistant engineer, is accused of coordinating with contractors to facilitate fake billing and unauthorized payments. He was previously arrested in a related case from Uttar Pradesh, according to officials familiar with the investigation.
The agency also revealed that assets worth ₹34 crore, including residential and agricultural properties across Madhya Pradesh and Uttar Pradesh, have already been attached under provisions of the Prevention of Money Laundering Act (PMLA). Further attachments are under consideration as the probe continues.
Authorities said the case highlights systemic vulnerabilities in public infrastructure billing systems, where forged documentation and internal collusion can lead to large-scale diversion of public funds. The investigation is ongoing, and additional arrests are not ruled out as financial records and digital evidence are being closely examined.
