In one of the most audacious financial frauds to surface in recent years, the Enforcement Directorate (ED) has launched a money laundering investigation into an alleged ₹100 crore insurance scam centered in Sambhal, Uttar Pradesh. The probe, which follows extensive police action, has uncovered a complex criminal network spanning 12 states and involving over 100 suspects, including health workers, insurance agents, and data entry operators.
A Web of Fraud: Murder, Forgery, and Payouts
According to law enforcement sources, the scheme revolved around securing insurance policies for individuals—some terminally ill, others already deceased—using forged documents and fake identities. The conspirators would then stage accidental deaths or present fabricated medical reports and death certificates to claim large sums from insurance providers. In some chilling cases, police allege that victims were murdered to fast-track policy payouts.
To support their claims, the accused submitted at least 29 forged death certificates. In other instances, genuine certificates were allegedly tampered with to align with the policy terms. Staged road accidents, fabricated autopsy reports, and collusion with local officials helped the gang avoid detection for years.
ED Joins the Investigation
While the police have already arrested 52 individuals, more than 50 suspects remain at large. With the financial magnitude of the fraud becoming clearer, the ED has now stepped in under the provisions of the Prevention of Money Laundering Act (PMLA). Officials confirmed that the central agency is currently reviewing case files, financial transaction records, and property holdings associated with the accused.
An ED official, speaking on condition of anonymity, said, “This is not just a case of fraud but a classic case of organized financial crime with clear indicators of laundering and layering. The proceeds of the scam appear to have been routed into real estate and luxury purchases.”
Links Across States and Sectors
Initial investigations reveal that the scam was not restricted to Sambhal alone. Similar fraudulent claims have emerged from Amroha, Badaun, Moradabad, and other neighboring districts. Authorities believe the scam may have been replicated across at least 12 states, using a similar modus operandi.
Health sector insiders, particularly ASHA workers and private data entry operators, allegedly played a pivotal role in sourcing names and falsifying records. Insurance agents and intermediaries are believed to have assisted in pushing through the applications without due diligence.
As the ED deepens its probe, the agency is expected to summon key suspects and possibly attach properties believed to have been purchased with the illicit gains.
Policy Oversight Under Scrutiny
The scam has also raised serious concerns about the ease with which fraudulent policies were approved and claims settled. Public sector insurance companies are now being asked to review their due diligence mechanisms and internal red flags.
Experts say the case underscores systemic vulnerabilities in India’s insurance and welfare schemes, particularly those relying on human interface rather than tech-based verification. “This should be a wake-up call for insurers and regulators alike,” said a senior fraud risk consultant.
The investigation continues, with more arrests expected in the coming weeks. If proven, the scam would mark one of the largest insurance frauds in India’s recent history.