The Kathmandu Valley Crime Investigation Office on Friday launched an investigation into 69 educational consultancy operators following multiple complaints of financial fraud in the name of overseas higher education.

Senior Superintendent of Police Santosh Khadka, chief of the office, said they are examining electronic devices seized from the consultancies during raids carried out across the Valley.

“We have recovered several devices. Fake government seals were also seized, so some operators could face forgery charges,” Khadka said. “We are verifying the details of others. The case is likely to proceed under fraud charges, and we are collecting evidence against everyone involved.”

He said data retrieved from the devices could also reveal evidence of illegal overseas placement activities.

“If victims come forward, it will make the legal process easier,” he added.

Superintendent of Police Rameshwar Karki, spokesperson for the office, urged students who had been cheated to contact police and file formal complaints against the operators.

According to Karki, those detained include five operators from Bhaktapur, five from Lalitpur and 59 from Kathmandu. Police raided 95 educational consultancies across the Valley.

“We found that these consultancies were providing educational counselling, test preparation and language classes without valid licences, without meeting required standards, and without renewing registrations,” Karki said. “Further investigation is underway to determine whether they were sending people abroad for foreign employment under the guise of student visas.”

Police have seized devices from all the centres for forensic examination.

Karki said police would coordinate with the Department of Foreign Employment and the Ministry of Education, Science and Technology if needed.

According to the department, complaints related to fraud by educational consultancies have increased sharply in recent years. Authorities say many consultancies, instead of registered manpower companies, have been illegally sending workers abroad.

“Educational consultancies are not allowed to send workers abroad for employment, conduct job interviews or collect recruitment fees,” said Mira Acharya, director general of the department. “But we have found large fraud networks linked to these consultancies.”

The department usually records such cases as individual fraud.

There are around 5,000 active educational consultancies across the country. Although the Ministry of Education had directed all firms to renew their registrations by mid-September, only around 1,000 complied.

The ministry said operating approval of institutions that failed to renew within the deadline had been automatically revoked.

Since the establishment of provincial governments, educational consultancies have also started registering with provincial education development directorates. Most of them operate in Kathmandu, Lalitpur and Bhaktapur.

Officials and industry representatives say weak monitoring by both the Ministry of Education and the Department of Foreign Employment has allowed the practice of sending workers abroad in the name of education to grow rapidly.

In December and January, Cozmo Educational Consultancy was accused of defrauding nearly 300 people of millions of rupees by promising jobs in Bulgaria and Croatia.

Sunil Tamang, 32, from Kavre, said the consultancy had offered him a job in Croatia with a monthly salary between 850 euros and 1,200 euros, with recruitment costs ranging from Rs700,000 to Rs1 million.

“The government says consultancies cannot send workers abroad, but no strong action is taken against them,” Tamang said. “I visited many consultancies in Kathmandu before choosing this one.”

He said the consultancy staff appeared professional and convincing.

“The counselling process was so smooth that we did not suspect fraud,” he said.

Janak Rawal, president of the Progressive Foreign Employment Entrepreneurs Forum, blamed government policy for the rise in illegal recruitment.

He said educational consultancies stepped into the space after the government halted institutional attestation of demand letters from Europe, allowing workers to travel through individual labour permits instead.

“Legitimate manpower companies that have deposited up to Rs60 million as bank guarantees to ensure safe and transparent foreign employment are being restricted, while educational consultancies are sending workers to Europe,” Rawal said.

He argued that restricting manpower agencies from sending workers to emerging European destinations had reduced state revenue and led to unregulated recruitment costs, increasing the risk of human trafficking.

Following a directive from the Ministry of Foreign Affairs on March 8, 2023, Nepali embassies in Europe stopped attesting institutional demand letters.

Recruitment agencies say the suspension pushed workers towards unregistered agents using individual labour permits.

Workers travelling through these channels often face financial exploitation and fraud.

Since institutional recruitment was halted, manpower agencies, consultancies and brokers have been charging high fees to send Nepali workers to Europe, industry representatives say.

Despite the suspension, the number of Nepalis travelling to Europe through individual labour permits has continued to rise.

According to the Department of Foreign Employment, around 35,000 Nepalis travelled to Europe through individual networks and agents in the last fiscal year alone. Romania received the highest number at 21,000, followed by Croatia with 11,000, Portugal with 1,900, Slovenia with 1,100 and Austria with 1,000.

Agency operators claim the actual number is much higher, as many workers travel through third countries.

The department acknowledged that the suspension of institutional demand letter verification had increased costs for workers travelling to Europe and exposed many to trafficking networks.

Acharya said legal action is being pursued against those sending workers abroad through illegal agents and middlemen.

Under the Foreign Employment Act, 2007, the Department of Foreign Employment grants permission to manpower companies to recruit workers on behalf of foreign employers only after demand letters are verified by the relevant Nepali embassy.

Section 15(1)(f) of the law, amended in 2019, states that original demand letters and powers of attorney authenticated by Nepali diplomatic missions in destination countries are mandatory.

However, Nepali embassies in Europe have maintained a strict position on verifying demand letters.

Embassy officials say they need additional funds to conduct on-site inspections of employers in countries under their concurrent jurisdiction. They also argue that verification cannot be completed within 15 days and have sought guarantees that workers will remain employed in the issuing country, avoid seeking asylum and stay in their assigned jobs.

Officials say the policy is linked to the growing number of undocumented and stranded Nepalis across Europe.