The Cyber Crime Police arrested from Nalgonda Gangula Purushottam Reddy, who allegedly diverted the funds online to the accounts of a private organisation, an official release said.
Reddy colluded with other suspects and misused the government funds for their personal gain.
According to their plan, he authorised the illegal e-cheque transfer, through which accused persons tried to benefit a private college to the tune of Rs 71 lakhs.
"For illegal authorisation of e-cheque, he had demanded money from the college management," the release said.
Further investigation into the matter is on.
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