North Dinajpur police have unearthed a racket where state government funds meant for scholarships for students of different communities were being stolen.

Police on Monday arrested Mahatabuddin, a resident of Karandighi block of the district who is suspected to be the mastermind of the racket. They also made some seizures and are gathering more information about the scam.

During preliminary investigation, it has been found that the accused and some of his associates used to obtain caste certificates of students of rural areas who had not applied for scholarships.

Police sources said preliminary investigations suggest Mahatabuddin might have amassed at least a couple of crores in this manner.

“They would then log into the official website of the state government where a student can file an application, seeking the scholarship that ranges from Rs 4,000 to Rs 20,000 with all relevant details of the candidate and furnish the bank account of the racket members to collect the scholarship money,” said a police officer.

Scholarships included those meant for students of Scheduled Saste, Scheduled Tribe, OBC and minority community categories.

Sources said that a few days back, some residents of Karandighi came to know about Mahatabuddin’s activities and informed the local police and the BDO.

“We came across a number of cases where it was found that the money for scholarship has been collected by him in the name of a student who has left studies and is a migrant worker. Eventually, it was found that Mahatabuddin and his associates used several bank accounts where money meant for students was transferred,” said Rustam Ali, a resident of Karandighi who is one of the complainants.

Mistri Murmu of Kaliaganj of the same district said that Jaya, his daughter, was studying nursing at North Bengal Medical College and Hospital. “But in the official portal of the state government, it would be seen that she is a student of Raiganj University which is false. Her caste certificate was used to avail the scholarship. She had never applied for it,” Murmu said.

A district official said that as soon as they learnt about the case, they filed a police complaint on Sunday. On Monday, Mahatabuddin was arrested. He was produced in court in Islampur and sent to police custody. Mahatabuddin, however, denied the charges and said he was framed.

“The accused is being interrogated for more information,” said Sana Akhtar, the SP of Raiganj police district.

Authorities of Raiganj University said they were aware of the case. “It is a serious matter,” said Durlabh Sarkar, registrar of the varsity.