₹780-cr IDFC First frauds: How funds from Haryana govt, Chandigarh MC were routed via realtor, jeweller | 5 key points

THe hitch of a jeweller o'er the weekend brought the amount list of arrests to 12 in single of the biggest banking fraud cases to rock northern India in recent years — a twin scam involving the embezzlement of government funds from Haryana state departments and the Chandigarh Municipal Corporation, routed through the IDFC First Bank branch in the city. The total amount involved comes to around ₹780 crore, of which ₹590 crore is from Haryana and ₹190 crore from Chandigarh UT. The Haryana State Vigilance and Anti-Corruption Bureau (ACB) arrested Rajan Katodia, owner of Sawan Jewellers, on Saturday after investigations revealed that more than ₹250 crore had been routed to his firm from companies linked to the prime accused. How money was routed via jeweller"The accused falsely recorded the sale of gold items to these firms/companies in their books," the ACB said in a statement issued from Panchkula, adding that Katodia had “played a pivotal role in hatching the conspiracy right from the inception of the fraud”. Katodia got a hefty commission in return, it is alleged.Sawan Jewellers received funds through entities such as Cap Co Fintech Services, SRR Planning Gurus Pvt Ltd and Swastik Desh Project — all identified as shell companies used to layer the diverted government money.How frauds worked, who's at the nub of itThe fraud centres on IDFC First Bank's branch in Sector 32, Chandigarh, where funds belonging to at least eight Haryana government departments — including the panchayats department and the pollution control board — were meant to be parked as fixed deposits (FDs). Instead of FDs, the money was systematically siphoned off through 12 accounts, 10 at IDFC First Bank and two at AU Small Finance Bank.Investigations by the ACB and the Enforcement Directorate (ED) have found that former bank employees Ribhav Rishi and Abhay Kumar were central to the operation. Rishi, who resigned from IDFC First Bank in June 2025, allegedly used his access to government accounts to divert funds into a web of shell entities, including Swastik Desh Projects Pvt Ltd, whose partners are Swati Singla and Abhishek Singla, RS Traders, and Capco Fintech Services. "The modus operandi involves the incorporation of a shell entity, Swastik Desh Projects Pvt Ltd, and huge government funds were diverted to this account initially," the ED said.Not just Haryana: How Chandigarh MC came into pictureThe fraud also extended to Chandigarh, the Union Territory that serves as joint capital of Haryana and Punjab. Here, financial irregularities worth approximately ₹190 crore were detected in accounts of the Chandigarh Municipal Corporation and the Chandigarh Renewable Energy and Science & Technology Promotion Society (CREST). For instance, officials discovered that fixed deposit receipts worth about ₹116.84 crore shown in records simply did not exist in the bank's system. This was uncovered when the civic body was consolidating funds following the closure of Chandigarh Smart City Limited in early 2026.Key conspirator: Guesthouse caretaker who rose to become biz tycoonA major breakthrough came with the arrest of Vikram Wadhwa, a 52-year-old Chandigarh-based hotelier and real estate developer, who had been evading law enforcement since the scam surfaced on February 22. Wadhwa was intercepted at a hideout in Kharar, Mohali, and was sent to five-day police remand to trace a money trail spanning over 2,400 transactions, HT has reported.In his disclosure statement, Wadhwa alleged that Ribhav Rishi had proposed routing government funds through companies he controlled, assuring him that "reverse entries could be made into the government accounts whenever required." Wadhwa claimed the arrangement began around 2023-24, with funds flowing into his real estate ventures in Chandigarh, Mohali and Kharar through entities including Prisma Residency LLP, Kinspire Realty LLP and Martell Buildwell LLP.Wadhwa's story is that of a meteoric rise that has led to jail. Originally from Malout in southwest Punjab, Wadhwa moved to Chandigarh in the 1990s as a guesthouse caretaker on a ₹1,500 monthly salary, before building a real estate empire. He accumulated substantial assets, including residential properties in Sectors 33, 21 and 36 in Chandigarh and a farmhouse in New Chandigarh.In his disclosure statement, Wadhwa claimed that he had known Rakesh Kumar Rishi, father of Ribhav Rishi, for several years. Rakesh introduced Wadhwa to his son, Ribhav Rishi. Where investigation standsThe Haryana ACB has so far arrested 12 individuals — six bank employees, four private individuals, one government official and the jeweller. Eleven of the accused are in judicial custody. The investigation team raided 16 locations, seizing over 25 electronic devices including mobile phones and laptops, six luxury vehicles — three Toyota Fortuners, two Innovas and one Mercedes — and identifying 10 properties suspected to have been acquired using proceeds of crime.The ED separately raided 19 premises across Chandigarh, Haryana's Panchkula and Gurugram, Punjab's Mohali, and even Bengaluru on March 12, freezing over 100 bank accounts. A Special Investigation Team (SIT) under senior IPS officer Ganga Ram Punia is overseeing the probe. Investigators suspect that some government functionaries may have acted as co-conspirators in facilitating the diversion of funds.(Inputs from HT correspondents and agencies)