A special court in the Indian state of Maharashtra has sentenced four people to jail in a US$45 million scam that employed 246 fraudulent bills submitted by Bank of India against letters of credit (L/Cs) issued by Canara Bank.

The former manager of the bank's Deccan Gymkhana Branch in Pune, SR Hegde, has been given a five year jail sentence. Two former account assistants at Varron Aluminium and Varron Autos as well as the proprietor of Ratna Metal Mart have been handed three year sentences.

Court hearing

The court heard that Hegde arranged for Canara Bank to issue fraudulent L/Cs for the Varron companies.

Subsequently, fraudulent bills were discounted by the Bank of India in the name of other companies but the L/C proceeds were remitted to the Varron companies which used these funds to settle its liabilities with State Bank of India.

Lengthy process

Proceedings in this case began five years ago after India's Central Bureau of Investigation received a complaint from Bank of India.

Three additional defendants, including the managing directors of the companies, have since died.

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