Bank Loan Fraud: 5 Convicted in Money Laundering Case, Sentenced to 3 Years in Jail

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Published on November 05, 2026

Bank Loan Fraud: 5 Convicted in Money Laundering Case, Sentenced to 3 Years in Jail

A Special PMLA Court in Ghaziabad has convicted five accused, including a former Syndicate Bank branch manager, in a money laundering case involving fraudulent loans sanctioned using forged property documents. The court sentenced each accused to three years of rigorous imprisonment and imposed a fine of ₹50,000, following an investigation by the Enforcement Directorate.

The Directorate of Enforcement (ED), Lucknow Zonal Office, has secured the conviction of five persons, including a former Syndicate Bank branch manager, in a money laundering case involving fraudulent loan sanctions and diversion of bank funds.

The Special Judge, Ghaziabad, through a judgment dated November 3, 2026, convicted V.N. Mathur, Rajeev Kumar, Arvind Chaudhary, Ankit Chaudhary and Pramod Kumar under the Prevention of Money Laundering Act (PMLA), 2002. Each accused was sentenced to three years of rigorous imprisonment and fined ₹50,000, with an additional three months of simple imprisonment in default of payment.

Fraudulent Loans Sanctioned Using Forged Property Documents

According to the ED investigation, V.N. Mathur, the then Branch Manager of Syndicate Bank's Gajraula Branch, allegedly entered into a criminal conspiracy during 2006–07 with Narendra Singh, Arvind Chaudhary and other associates.

The investigation revealed that loans and overdraft facilities were sanctioned to the accused, their firms and associates using forged sale deeds relating to non-existent properties, false non-encumbrance certificates and fabricated property valuation reports.

Bank Loan Funds Diverted Through Multiple Accounts

Instead of being utilised for their sanctioned purposes, the loan proceeds were allegedly withdrawn in cash and routed through multiple savings bank accounts and demand drafts to conceal their illegal origin.

The funds were subsequently used to acquire immovable properties, including plots in Alipur, District J.P. Nagar, and Dehradun.

Money Laundering Conviction Despite Acquittal in CBI Case

An important aspect highlighted by the ED is that Rajeev Kumar and Pramod Kumar, who were acquitted in the underlying CBI case, were subsequently convicted for money laundering based on evidence presented before the Special PMLA Court.

The original investigation originated from two FIRs registered by CBI's Anti-Corruption Branch, Ghaziabad, following a complaint from Syndicate Bank's Chief Vigilance Officer.

The conviction highlights the legal consequences of using forged collateral documents, diverting sanctioned bank loans and concealing the proceeds through multiple financial transactions.

Source: Directorate of Enforcement, Press Release dated November 4, 2026.

Source: CA Sansaar