Government funds embezzled in the name of pension payments

Akhtar Hossain, a retired member of the Bangladesh Air Force, was supposed to receive Tk 15,406 in his bank account as his pension in June this year. But that month, he received nearly Tk 400,000 in addition to his regular pension. According to sources familiar with the matter, he received the extra money as part of an arrangement with several officials of the pension office.

Under the arrangement, he kept Tk 100,000 as commission and returned the remaining amount to designated bank accounts controlled by a fraud ring operating around the Chief Controller of Defence Finance (CCDF) office.

In this way, Akhtar received nearly Tk 7.2 million outside his regular pension over a period of more than a year. He kept a fixed commission from the money and returned the rest to the ring. During the same period, however, he was supposed to receive just over Tk 200,000 in pension and festival allowances.

Akhtar is not the only one. Government funds were siphoned off using the bank accounts of many other retired members of the armed forces. A preliminary report by an investigation committee found that 346 arrears pension bills were generated in the names of 26 pensioners, resulting in the embezzlement of Tk 66.8 million (Tk 6,68,70,928).

The fraud was carried out using the government’s digital system for paying pension arrears, iBAS++ (Integrated Budget and Accounting System). First, unauthorised arrears bills were generated and the money was transferred to pensioners’ bank accounts.

They were then paid commissions before returning the remaining money to accounts held by several entities. Later, attempts were made to reconcile the transactions in official records by showing fictitious treasury challans, suggesting that the money had been returned to the government treasury.

Initially, information was found on excess transactions totalling Tk 42.5 million in the bank accounts of 23 pensioners. A subsequent preliminary investigation found that nearly Tk 66.9 million had been transferred to the accounts of 26 pensioners.

On 2 September, two officials of the CCDF office under the Controller General Defence Finance (CGDF) were temporarily suspended over their alleged involvement in the fraud. They are former Audit Superintendent Shaheenur Rahman Khan and Deputy Assistant Finance Controller Ishrat Jahan of the Chief Controller of Defence Finance (Pension and Fund), or CCDF, office.

Several officials of the department believe this is not the final figure. Examining older transactions and arrears pension bills in iBAS++ could uncover more instances in which government funds were siphoned off using the same method. Some sources familiar with the matter claim that an investigation covering the period of the previous Awami League government could uncover evidence of fraud involving at least hundreds of crores of taka.

Comptroller and Auditor General (CAG) Md Nurul Islam told Prothom Alo, “Everything has been ordered to be investigated.” However, the investigation committee that was formed has been instructed to examine only transactions related to the matter during the past two fiscal years, 2024–25 and 2025–26.

The CCDF office under the CGDF oversees pensions for retired members of the armed forces. According to sources familiar with the matter, several officials at the office collected the personal information of retired members from pension records. They would then contact the pensioners directly or through pensioners known to them.

If a pensioner agreed to receive additional money, keep a commission and return the remainder, money would start being transferred to their bank account from the following month. The funds were sent from the government treasury under the category of “arrears of monthly pension.”

In some cases, the officials reached agreements with pensioners in exchange for commissions. Some were threatened with the possibility of their pensions being withheld. In other cases, pensioners were given false information and told that arrears of a freedom fighter allowance belonging to someone else’s father would be deposited into their accounts.

The irregular transactions first came to light recently when a pensioner was collecting information to prepare his income tax return and discovered unusual transactions in his bank account. Subsequent inquiries based on his case revealed similar transactions in the accounts of many others. Specific records have been found showing that funds were siphoned off in this manner for at least a year. However, officials familiar with the matter believe the manipulation had been going on for much longer.

Pension payments are transferred to the relevant individuals’ bank accounts every month through iBAS++. Including monthly pension payments and three festival allowances, a pensioner normally receives money 15 times a year. Any payment of pension arrears or additional funds requires approval from the higher authorities. With such approval, a maximum of 30 transactions can be made in a fiscal year.

Yet, in the first six months of this year alone, some pensioners’ accounts recorded 20 or more unusual transactions. The required approvals for these transactions had not been obtained.

Documents show that the monthly pensions of the retired members concerned ranged from Tk 11,000 to Tk 26,000. Yet, in addition to their regular pension entitlements, money was transferred to their accounts multiple times almost every month. As the transaction limit for each transfer was Tk 200,000, each payment was made at Tk 199,980.

Besides Akhtar Hossain, nearly Tk 6.4 million was transferred in 32 transactions to the account of retired Navy member GM Sajjad Hossain over more than a year. Nearly Tk 4.4 million was transferred in 22 transactions to the account of Md Harun-or-Rashid Mridha over eight months, while around Tk 4 million was transferred in 20 transactions to the account of Md Shahinur Islam over six months.

Around Tk 1.6 million was transferred to the account of Md Shahar Ali in eight transactions over three months; nearly Tk 1.2 million to the account of Amzad Hossain in six transactions over three months; and around Tk 400,000 to the account of Khandaker Abul Hossain in two transactions over one month.

In total, more than Tk 25 million was siphoned off within a year using the bank accounts of just these seven pensioners.

Prothom Alo spoke to five pensioners whose accounts recorded unusual transactions. According to them, Audit Superintendent Shaheenur Rahman Khan, GM Sajjad Hossain and another pensioner, M Shahin, were involved in bringing them into the fraud ring.

Typically, around Tk 400,000 was transferred in two instalments. Of this, Tk 100,000 or Tk 80,000 was kept as commission. The remaining money was returned to bank accounts opened in the names of three companies—Adnan Enterprise, Tamanna Enterprise and Adarsha Stationery.

An investigation found that Tk 910,000 was deposited into Adarsha Stationery’s account from Dutch-Bangla Bank’s Khulna and Rajshahi branches in March and April alone. The account, maintained at the bank’s Motijheel Foreign Exchange branch, is owned by GM Sajjad Hossain. The deposits were made by M Shahin.

In addition, more than Tk 1 million was deposited into Adnan Enterprise’s account from Al-Arafah Islami Bank’s Khulna branch, while Tk 300,000 was deposited into Tamanna Enterprise’s account from its Tangail branch. M Shahin is named as the depositor on both deposit slips. Attempts to contact him were unsuccessful as his mobile phone was switched off.

GM Sajjad Hossain told Prothom Alo, “Shaheenur Rahman from the audit office contacted me. Accounts Officer Ishrat Jahan is also involved in the manipulation. Basically, the two of them carried this out. I trusted them and am now in trouble.”

Sajjad said, “They would deposit around Tk 400,000 into my account every month. As soon as the money arrived, Shaheenur Rahman would contact me. Sometimes he collected the money in cash, and sometimes I had to deposit it into an account. He gave me Tk 20,000–25,000 on some occasions and Tk 100,000 on others.”

Amzad Hossain, a retired Navy member, said M Shahin, whom he knew previously, took his bank account number, saying that arrears of his father’s freedom fighter allowance would be deposited into the account. Around Tk 1.2 million was transferred to the account in six transactions over three months. Amzad said he did not receive any commission. He learned about the fraud only after his pension was suspended.

Sources at the CCDF office said that if excess money is mistakenly transferred to a pensioner’s account, the rules require it to be returned to the government treasury through a treasury challan and adjusted accordingly. The fraudsters exploited this system by submitting fake treasury challans and showing the siphoned-off money as having been returned.

A challan dated 25 March in the name of Shahinur Islam showed a deposit of Tk 1,599,840. However, online verification showed that the challan actually belonged to another person, Iqbal Hasan Robin. Although the amount was shown as nearly Tk 1.6 million, the actual challan amount was only Tk 8,050.

Another challan dated 8 July, showing a deposit of Tk 800,000 in Shahinur’s name, used the challan of a woman named Archana Rani Dutta, whose actual deposit was only Tk 494.

A document showing that nearly Tk 1.6 million had been deposited in the name of GM Sajjad Hossain contained a challan belonging to Shah Alam Kabir for just Tk 3,006. Similarly, a Tk 12,122 challan belonging to Miraj Uddin was used to show the return of nearly Tk 1.2 million in the name of Akhtar Hossain.

Two fake challans, showing deposits of around Tk 1.2 million and Tk 1.6 million in the name of Harun-or-Rashid Mridha, were also found. The actual deposits shown on the two challans were Tk 1,000 and Tk 12,122, respectively.

Prothom Alo investigated the pension fraud for two weeks. To further verify the information, the newspaper examined records at the relevant offices under the CGDF.

Prothom Alo spoke to CAG Md Nurul Islam on 1 September. He said he had ordered the formation of an investigation committee after learning about the fraud. “Once the investigation report is received, action will be taken against those responsible in accordance with the rules,” he said.

He added that fraud had previously been detected at various government offices. The officials involved had been temporarily suspended, and cases had been filed against many of them. If evidence is found in this case, similar action will be taken against those involved.

The two officials concerned were temporarily suspended the day after the CAG’s comments were obtained. The suspension orders, citing the investigation committee’s preliminary report, said evidence had been found that the user IDs of Shaheenur Rahman Khan and Ishrat Jahan were used to certify and approve arrears bills for pensions and allowances and to process electronic fund transfers (EFTs).

Using their user IDs, 346 arrears pension bills belonging to 26 pensioners were paid in violation of regulations. Based on the preliminary report, the two officials were held fully responsible for the embezzlement.

Prothom Alo spoke to Shaheenur Rahman Khan a week before his suspension. At the time, he claimed, “I know nothing about any of this. An investigation committee has been formed. Let the committee find out who did what.”

However, the suspension order states that evidence was found of bills being approved and EFTs being processed using Shaheenur Rahman’s ID. Prothom Alo made several attempts to obtain a comment from the other suspended official, Ishrat Jahan, but could not reach her.

Several sources familiar with the matter allege that Shaheenur Rahman Khan is very close to GM Mamunur Rashid, Finance Controller (Army) Pay-1. On 12 July, Shaheenur was transferred to Mamunur Rashid’s office. The sources also claim that both are known to be close to CAG Md Nurul Islam. Ishrat Jahan, meanwhile, was transferred to the Finance Controller (Army) Pay-2 office in July.

Asked about allegations that he was close to the accused officials, the CAG told Prothom Alo, “Everyone working in offices under my authority is close to me. Those who perform well are retained. I speak to everyone. I run the office in a friendly environment. I have never liked acting like a boss.”

A three-member investigation committee was formed on 17 August to investigate the fraud involving arrears of monthly pension payments. The committee was later reconstituted with AKM Hasibur Rahman as convener, Md Mofizur Rahman as member-secretary and Mst Beauty Khatun as a member.

The committee has sought various information, including pension statements for the 2024–25 and 2025–26 fiscal years from the CCDF office, paid arrears bills, and the iBAS++ user IDs of the officials and employees concerned.

However, member-secretary Mofizur Rahman had worked at the office from 2021 until 4 August, 2025. He served at the office for nearly 14 months during the period under investigation. This has raised questions about whether his involvement constitutes a conflict of interest.

Asked about this, Mofizur Rahman told Prothom Alo, “The authorities may have thought that I have experience in this matter. I can properly examine the technical aspects there. That may be why they assigned me to the committee.”

Several officials at the CCDF office said the pension operations had not undergone regular audits since 2023. As a result, even when fake treasury challans were submitted, they were not verified in time.

Another case of government funds being siphoned off through iBAS has been uncovered in Bogura. A letter sent by the Divisional Controller of Accounts, Rajshahi office, to the Controller General of Accounts on 31 August said Tk 124,648,826 had been irregularly paid through 195 travel and recreation allowance bills in the names of six police personnel.

However, during an inspection, officials found no evidence that most of the bills, including their original copies, had been submitted online by the relevant offices. The letter said the user IDs of two officials had been used to change the bill codes and employee categories, followed by approval of the bills and electronic fund transfers (EFTs).

In addition, the Criminal Investigation Department (CID) of police has found evidence that at least Tk 124.03 million was transferred to three bank accounts through fake pension bills. Its report claimed that nearly 250,000 fake pension payment orders had been generated and the user IDs of 30 district and upazila accounts offices had been used.

Transparency International Bangladesh (TIB) Executive Director Iftekharuzzaman told Prothom Alo that since the fraud was identified through the authorities’ own inquiry or investigation, there is no scope to ignore it.

“Several similar incidents have also come to light. So this is no longer an isolated matter. All such incidents should be investigated thoroughly, from top to bottom. Action should be taken against those involved in the fraud,” he said.