An accomplice who helped him embezzle is still at large
While the Office of the Attorney General is yet to charge the nine, who were allegedly involved in embezzling Nu 576.469 million from the Bhutan Development Bank Limited, the Anti-Corruption Commission has unearthed another embezzlement of Nu 11.764M from its branch offices in Gelephu and Pemagatshel.
The commission forwarded its latest findings to the OAG last week. OAG officials said that they are yet to assign a prosecutor to review ACC’s findings.
The commission has implicated the assistant branch manager of Pemagatshel, Phurpa Gyeltshen, with 36 counts of embezzlement of funds and securities by public servant, five counts of commission amounting to abuse of function, and 36 counts of forgery. He is alleged to have siphoned off Nu 3.050M from Gelephu branch and Nu 8.472M in Pemagtshel from rural credit fund by creating 36 fictitious loan accounts.
ACC’s investigation revealed that Phurpa Gyeltshen had used names, bank accounts and documents of bank’s former and currents clients and few other individuals to carry out his embezzlements scheme from 2012-2017. “While many clients/individuals were innocent victims of his corruption offence, few have willingly assisted him in the act,” the ACC’s findings stated.
The commission also found that Phurpa Gyeltshen, while working as branch assistant also referred as product service officer (PSO) in Gelephu, created and sanctioned 19 fictitious loans in his old clients’ name without their knowledge. The loan amounts were disbursed into the clients’ saving accounts and later withdrawn by him after forging the signature of the clients either from the counter or the field.
The ACC alleged that Phurpa Gyeltshen created fictitious loan accounts by using key documents related to mortgage and authorisation from closed files of ex-clients.
In few instances, he had allegedly used random bank clients to make withdrawals from the counters by providing fake authorisation of actual account holders. When these loans fall due for repayments, he created and sanctioned new loans to repay the loans that are due.
After he was transferred to Pemagatshel from Gelephu in 2015, he used the same modus operandi to repay the outstanding loans of Gelephu clients. ACC officials found that the money embezzled from Pemagatshel branch was mostly used to close the loan accounts created in Gelephu either through direct deposit by himself or by using few individuals like Damcho Wangdi and Tashi Jamtsho, both clients of Pemagatshel branch.
The commission’s investigation revealed that the front page of loan appraisal forms of these accounts were filled by Phurpa Gyeltshen with forged signatures/ thumbprints of the individuals reflected as clients while the mandatory documents such as mortgage declaration, authorization and verifications provided by gups and tshogpas, were used from the closed files of various ex-clients. “However, for some accounts, files were either missing or have never been created,” the investigation report stated.
The report stated that Phurpa Gyeltshen used the embezzled fund to buy land, do business, pay back to the individuals from whom he had borrowed money and spent on his girlfriend.
In addition to the 36 fictitious loan accounts, Phurpa Gyeltshen had sanctioned one illegitimate loan amounting to Nu 0.3M and four illegitimate loans amounting to Nu 1.9M under Gelephu and Pemagatshel branch respectively.
As a PSO, Phurpa Gyeltshen carried out end to end job of opening accounts to loan application documentation in addition to field withdrawal and collections. His direct and frequent contact with the clients during the scheduled visit to the gewogs enabled him to know the clients closely. “This opportunity was abused to target individuals/clients who are mostly illiterate or live alone,” the ACC report stated. “These fictitious loans were prepared and approved whenever he officiated as the branch manager.”
The commission also found that when it comes to withdrawal from the clients’ accounts, he filled in withdrawal slips and handed over to the cashiers during peak hours with an excuse that the client was in hurry and had left the withdrawal slip with him. In few instances, he withdrew cash in the field from the fictitious accounts.
The ACC also recommended the OAG to charge the bank’s client, Damcho Wangdi for offence of concealment of corruption proceeds under the Anti-Corruption Act for distributing money from fictitious loan accounts created by Phurpa Gyeltshen in Pemagatshel to other loan accounts in Gelephu.
He allowed Phurpa Gyeltshen to use his personal saving account for depositing cash, which he later distributed into fictitious loan accounts under Gelephu branch in addition to clearing his own Over Draft (OD) loan.
The ACC charged Damcho Wangdi, a businessman in Pemagatshel, on seven counts of concealment of corruption proceeds.
How the issue surfaced?
The Commission’s investigation revealed that Phurpa Gyeltshen’s illicit activities did not remain completely oblivious to the management. As soon as he got transferred to Pemagatshel branch, the new PSOs serving Gelephu were informed by some clients that the loans listed in their names were never taken by them in addition to few clients personally lodging a loan denial complaint to the then chief manager of Gelephu branch, Yonten.
“Besides informing Phurpa Gyeltshen on the loan denial issues raised by the clients, the management however did not take serious action against the issue which led to the continued embezzlement of funds from Pemagatshel branch to cover up the accounts created in Gelephu branch,” the commission’s report stated.
On July 17 last year, the BDBL reported to police in Pemagatshel that Phurpa Gyeltshen had embezzled more than Nu 3.8M by forging documents in the name of eight individuals. Police registered a forgery case. Phurpa Gyeltshen was arrested from Pemagatshel town and detained for further enquiry. Police conducted a preliminary investigation and on August 28, forwarded the case to the commission on.
The commission investigated the alleged embezzlement of fund and forgery and commission amounting to abuse of function between September 2017 and January 2018. According to ACC officials, the investigation prolonged because they could not locate Phurpa Gyeltshen’s accomplice Damcho Wangdi for interrogation. He is still at large and Kuensel has learnt that the court has issued an arrest warrant against him.
Meanwhile, OAG’s chief prosecution officer Kinley Tenzin said that the OAG would register the embezzlement case amounting to Nu 576.469 M at the BDBL in Thimphu early next month. The commission forwarded the report on unauthorised enhancement of overdraft (OD) and term loan fraudulently between 2013 and 2016 by the project officer of BDBL, to the OAG on June 22 last year.