The police investigation following the arrest of a Village Extension Officer (VEO) for allegedly siphoning off lakhs of rupees from the LIFE Housing Scheme has revealed that the fraud could be more extensive than initially suspected.

The accused, 37-year-old Rani Lakshmi, an employee of Thannithodu panchayat, was arrested on Wednesday. According to sources, the investigation has so far revealed alleged irregularities in all three panchayats where she had worked.

Rani Lakshmi had initially worked at Aruvappulam panchayat in Konni, where the police and the Local Self-Government Department suspect the alleged fraud began.The police have received information about alleged financial manipulation during her tenure at Aruvappulam panchayat in Konni. The fraud detected in Seethathodu and Thannithodu panchayats , meanwhile, amounted to more than ₹50 lakh.

The police are also examining reports that Rani Lakshmi gifted her husband a tipper truck with money allegedly siphoned off in the fraud.

She was arrested on the basis of a complaint filed by the Thannithodu panchayat secretary over the alleged embezzlement of LIFE scheme funds. The investigation, however, has found that a much larger amount was allegedly siphoned off from Seethathodu panchayat.

As per the police case, Rani Lakshmi allegedly fabricated documents and diverted funds meant for eligible LIFE scheme beneficiaries into bank accounts belonging to her relatives and others.

She is also an accused in a couple of criminal cases registered at the Konni police station.