The Kathmandu District Court has begun hearings in the high-profile fake Bhutanese refugee scam, nearly three years after prosecutors filed charges against former ministers, senior government officials and alleged brokers accused of defrauding hundreds of Nepalis with false promises of resettlement in the United States.

The court on Wednesday placed the case on a continuous hearing schedule, marking the first substantive phase of proceedings since charges were filed in May 2023.

Judge Tej Bahadur Khadka's bench heard arguments from lawyers representing some of the defendants and ordered the case to proceed without interruption. Court officials said the case entered the continuous hearing stage after Wednesday's bench retained it on the court's continuous hearing list, allowing proceedings to continue in subsequent sittings.

“The case has now entered continuous hearing,” said Shiva Khatiwada, information officer at the Kathmandu District Court. “Although the case was filed three years ago, substantive hearings have only now begun.”

The scandal is one of Nepal's largest corruption and organised crime cases in recent years. Investigators say an organised network exploited state institutions and forged official government documents to collect millions of rupees from Nepali citizens by falsely promising to place them on lists of Bhutanese refugees eligible for third-country resettlement in the United States.

The scheme allegedly targeted people from districts across Nepal, including Jhapa and Kanchanpur, extracting large sums of money in exchange for non-existent refugee opportunities.

The case eventually exposed the alleged involvement of politicians, senior bureaucrats, security officials and middlemen, triggering an investigation that reached the highest levels of government.

On May 24, 2023, the Kathmandu District Government Attorney Office filed charges against 30 defendants, including former deputy prime minister and CPN-UML leader Top Bahadur Rayamajhi, former home minister and Nepali Congress leader Bal Krishna Khand, former home secretary Tek Narayan Pandey, and Indrajit Rai, former security adviser to then home minister Ram Bahadur Thapa.

They face charges of fraud, forgery, organised crime and crimes against the state.

Two supplementary indictments were later filed as investigators uncovered additional suspects and evidence. On Wednesday, Judge Khadka's bench consolidated all three cases and began hearing them together.

Since the original filing, the case has appeared on the court docket 74 times. Proceedings had largely been limited to detention hearings, procedural motions and appeals over custody orders.

According to court officials, a fire that damaged court and government attorney records on September 9, 2025, also contributed to delays. Reconstruction of the files and records later allowed the case to move forward.

Government attorney Santosh Katuwal said the start of continuous hearings marked a significant step towards concluding a case that has remained in the judicial system for years.

The prosecution's case is based on an investigation conducted by the Kathmandu District Police Range, which alleged that the accused used forged documents linked to a government task force on Bhutanese refugees to create a fraudulent pathway for Nepali citizens seeking migration opportunities abroad.

Others named in the original indictment were former lawmaker Ang Tawa Sherpa, Bhutanese refugee leader Tek Nath Rizal, alleged brokers Keshab Prasad Dulal, Sanu Bhandari, Sagar Rai and Sandesh Sharma, former minister Rayamajhi's son Sandip Rayamajhi, and Narendra KC, former personal secretary to ex-home minister Khand.

Others charged include Gobinda Kumar Chaudhary, Ram Sharan KC, Shamsher Miya, former chair of the Hajj Committee under the Home Ministry, and alleged middleman Hari Bhakta Maharjan.

On June 16, 2023, the Kathmandu District Court ordered several key defendants into custody, while a small number were released on bail. Defendants Tanka Gurung and Laxmi Maharjan were released on bail of Rs 1 million and Rs 500,000, respectively.

The investigation later expanded.

On April 24, 2024, prosecutors filed a supplementary case against five additional defendants, including alleged network member Keshab Prasad, following a complaint lodged by Dawaphuri Sherpa.

Another major development came on June 28, 2024, when Pratik Thapa, son of former home minister Ram Bahadur Thapa, was arrested after the case had already reached court. He remains in custody.

Police later arrested another suspect, Bechan Jha, near the Nepal-India border in Kanchanpur. Following further investigation, prosecutors filed a separate supplementary indictment against him on August 13, 2024.

Several defendants named in the original charges remain at large. The case has also generated a lengthy legal battle over detention orders.

After the district court ordered a number of defendants into custody, many challenged those decisions before the Patan High Court.

On December 1, 2023, the High Court released several defendants, including Hari Bhakta, Narendra, Sandip, Tek Nath and Ram Sharan, on bail. Others—Tanka, Laxmi, Aashish Budhathoki and Keshab—were released on ordinary court appearances. Sandip was released on bail of Rs 3 million, while Tek Nath, Hari Bhakta and Ram Sharan were each released on bail of Rs 1.5 million. Narendra and Shamsher were released on bail of Rs 1 million each.

Former home minister Khand's detention led to a split verdict among High Court judges. The dispute was ultimately resolved by a third judge, who ordered his release on Rs 30 million bail on December 14, 2023.

Other defendants, including Top Bahadur, Tek Narayan and Indrajit, challenged their continued detention before the Supreme Court. On April 25, 2024, the Supreme Court ordered the release of some defendants on bail while keeping several others in custody.

Several key accused, including Top Bahadur, Tek Narayan, Sanu, Keshab Prasad, Sandesh, Indrajit and Sagar Rai, remain in custody. Pratik and Bechan are also currently in custody.

The investigation traced the origins of the scam to a government effort to address issues related to the remaining Bhutanese refugees living in camps in eastern Nepal after the large-scale third-country resettlement programme sent tens of thousands of refugees to countries including the US, Australia, Canada, Germany, New Zealand and Finland.

According to investigators, the criminal network exploited that process by gaining access to sensitive Home Ministry documents and manipulating official records.

Central to the case is a report prepared by a government task force led by former joint secretary Bal Krishna Panthi. Police allege that members of the network forged sections of the report and inserted fake names into official documentation to create the appearance that hundreds of Nepalis qualified as Bhutanese refugees.

Investigators say former home secretary Tek Narayan played a key role by providing the task force report to members of the network. The group then allegedly attempted to secure government approval to send some of those who had paid money to the United States under the guise of refugee resettlement.

The scandal began to unravel in March 2023 after police arrested alleged mastermind Keshab Prasad and several associates. Subsequent investigations steadily widened, drawing in powerful political figures, senior civil servants and individuals with close links to the country's security and administrative apparatus.

With continuous hearings now underway, the court is expected to begin examining evidence and witness testimony in a case that has come to symbolise both high-level corruption and the vulnerability of ordinary Nepalis seeking opportunities abroad.