The Employees' Provident Fund Organisation (EPFO) has launched a probe into a fraud involving its Mumbai suburban office staff, which might cost the retirement fund up to Rs 1,000 crore, according to Economic Times report.

This was purportedly accomplished by opening fake accounts and transferring funds or settling claims in defunct corporations like Jet Airways, the report said.

“We expect EPFO losses due to this particular fraud to mount to up to Rs 1,000 crore, arising due to violation of rules and tax evasions… Offenders should be punished for doing injustice to members’ life savings and maligning this apex retirement body," Prabhakar Banasure, a member of EPFO's central board of trustees was quoted as saying in the report.

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According to the report, which cited sources, an internal investigation is ongoing to determine the true amount of losses while the vigilance department examines past records. A final report will be submitted to the EPFO's governing body soon.

The scam was reportedly perpetrated in Mumbai's Kandivali office.

It was accomplished through the recruitment of former Jet Airways pilots and crew personnel, which included many foreigners.

Machindra Bamne, senior social security assistant of Kandivali PF office, was believed to have been suspended over the alleged settlement of illegal PF claims of the airline’s then employees prior to Jet Airways being admitted to the National Company Law Tribunal (NCLT) for debt resolution.

According to an order dated August 18, regional provident fund commissioner-1 RO, Kandivali East, Bamne “received illegal gratification from some members into his bank account for settlement of PF claims related to employees of M/s Jet Airways".

The PF accounts of numerous Jet Airways pilots and crew personnel were reportedly exploited to syphon off funds, which allegedly benefited some EPFO employees working at the Kandivali office, according to the report.

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“They were hand in gloves with select manipulators on the Jet side before the airline company went to NCLT… I have been raising this matter to competent authorities including EPF chairman," Banasure claimed, according to the report.

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