A salary fraud worth approximately Rs 2 crore, buried inside routine payroll records for nearly three years, has been busted in the Bastar district police department in Chhattisgarh. The case stands out not only because of the scale of the alleged embezzlement but also because of how it was caught: not by a human auditor or a whistleblower, but by an AI-based audit system that flagged abnormal spikes in salary payments. Three police constables have been arrested in connection with the case.
What the AI Audit Found
Bastar Superintendent of Police Shalabh Kumar Sinha stated that both internal and external audits were conducted at the SP office. During this process, an AI-based review flagged an unusual increase in salary expenditure that had gone unnoticed until then. Taking the alert seriously, investigators conducted a detailed examination of payroll records, which revealed large-scale manipulation. The AI tools picked up abnormal patterns in salary payments that had stayed invisible to human reviewers for months. Investigators then went through salary records, soft copies of data, and banking transactions in meticulous detail, piecing together the full picture of an alleged embezzlement running into crores of rupees.
The Mastermind and His Method
The three arrested constables are Girish Rai, Rajkumar Katlam, and Hemant Matthew. Police consider Girish Rai to be the mastermind of the entire scheme. He had been posted as an assistant in the salary branch of the SP office since 2012, appointed on compassionate grounds. Rajkumar Katlam and Hemant Matthew were serving in other branches of the department.
Investigators established that Girish Rai would alter the soft copies of salary records before the payroll processing cycle began each month. Through this method, he inflated his own salary and those of the other two constables, allowing additional amounts to be drawn from government accounts. Girish Rai confessed to the crime during questioning. According to police, between October 2023 and May 2026, a period of approximately three years, the accused illegally withdrew approximately Rs 1.5 crore to Rs 2 crore from government accounts.
The Fake Loan Scheme
Investigators uncovered a second technique used to siphon funds. Girish Rai told certain employees that their salaries were being increased because they were being given a loan. He would then collect the inflated portion back in cash, presenting it as a loan repayment or instalment. Police have identified the employees whose salaries were inflated in this manner and who allegedly benefitted from the arrangement. All of them are now being questioned to determine whether they were willing participants in the conspiracy or were simply used without their knowledge.
Why the Fraud Went Undetected for Years
Police officials explained that salary expenditure in the police department fluctuates naturally every month due to staff transfers, new postings, and changes in total headcount. This built-in variability made incremental increases in individual salary payouts look like routine operational changes. The accused deliberately exploited this, adding small amounts to their own salaries and those of a few others each month. Since no single increase was large enough to raise immediate suspicion among human reviewers, the fraud ran undisturbed for months and eventually stretched across years.
FIR Registered, All Three Accused Remanded to Judicial Custody
After the investigation concluded, a case was registered on 29 June at Jagdalpur police station against all three constables under sections covering fraud, forgery, criminal breach of trust, and embezzlement of government funds. The following day, all three were produced before a court, which remanded them to judicial custody. Police are continuing to probe the matter, including examining the roles of other employees who may have received inflated salary payments as part of the scheme.
