In a major breakthrough against large-scale financial crime, the Economic Offences Wing (EOW) has arrested the mastermind behind a massive ₹25-crore fake gold loan racket in Nagpur. The principal accused, who had been evading authorities and hiding underground for five months, was finally nabbed following an extensive manhunt. His capture brings the total number of arrests in the case to seven, including bank officials, branch managers, and a professional gold valuer.
The intricate multi-crore fraud revolved around securing high-value loans from a private bank by pledging spurious, fake gold ornaments instead of genuine bullion. Investigators revealed that the racket systematically exploited banking loopholes across at least nine different city branches, turning routine collateralized lending into a coordinated extortion of bank funds.
The mastermind began setting up the operation years earlier. Around 2018–19, he took a legitimate gold loan in his own name and maintained an unblemished repayment record to build high creditworthiness with the bank. Once trusted by the institution, he started using the identities of daily-wage laborers from his scrap business, along with names of acquaintances and relatives, to float dozens of bogus loan applications.
The scheme functioned smoothly because key players at every step of the verification chain worked in collusion. Investigators found that multiple branch managers and a deputy manager actively assisted in clearing the applications. A appointed valuer prepared 155 fraudulent valuation reports, certifying cheap metals as high-purity gold in exchange for kickbacks of ₹5,000 per report, while another associate arranged 38 fake accounts.
To ensure the racket remained hidden, internal audit procedures were also compromised. Regular quarterly audit teams were allegedly bribed to overlook discrepancies and certify the fake ornaments as genuine gold during inspections. Because borrowers, valuers, branch staff, and auditors acted together, the scheme ran undetected for months, ultimately defrauding the bank of over ₹23.31 crore.
The operation began falling apart during an independent gold audit that flagged serious irregularities regarding the weight and purity of pledged items. Following this red flag, the bank launched an internal inquiry across 152 suspicious accounts in branches including Manish Nagar, Medical Chowk, Narsala, Katol Road, Ajni Chowk, Chhatrapati Chowk, Wardha Road, Pratap Nagar, and Nandanvan, before filing a formal police complaint.
During coordinated raids, police seized laptops, mobile devices, transaction documents, vehicles, and a master list of fake borrowers that provided crucial direction to the probe. Forensic teams reconstructed the complex money trail by tracking the initial loan disbursements, subsequent bank transfers, and final destination accounts where the stolen funds were parked.
Authorities have stated that the recent arrests are not the end of the operation. The focus of the Economic Offences Wing has now shifted toward recovering the siphoned funds, questioning additional branch staff, and dismantling any remaining links in the illicit network.