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Eleven months after B. Ramalinga Raju, the former chairman of Hyderabad-based Satyam Computer Services, confessed to masterminding a $1.2 billion fraud at Indias fourth largest I.T. outsourcing company, the dirt is still tumbling out. On Nov. 24, the country's Central Bureau of Investigation (CBI) released findings that show the alleged fraudulent accounting and embezzlement was far larger than originally thought. Raju and nine accomplices skimmed some $2.5 billion from the company, according to CBI investigators, funneling the money into a collection of assets and property that could make even a profligate Bollywood star blush.

According to a 200-page CBI report, Satyam insiders forged board resolutions to secure $260 million in bank loans which were diverted for personal use, and over several years generated fake customer identities and account statements to inflate Satyam's revenues by millions of dollars, boosting the company's share price and making its books look far healthier than they were. Investigators following the paper trail have discovered that embezzled funds were channeled into 1,065 properties valued at $74 million, including some 6,000 acres of land, 40,000 sq. yd. of housing plots, and 90,000 sq. ft. of other developed real estate. The properties, bought in the name of some 80 shell companies, included prime commercial plots in and around Hyderabad, Bangalore, Chennai and Nagpur.

CBI on Nov. 24 filed charges in court, and trials are likely to begin soon. Raju's lawyer, S. Bharat Kumar, was not available for comment. A spokesman for Satyam, which was purchased by the software arm of Mumbai-based auto conglomerate Mahindra & Mahindra earlier this year, declined comment, saying we haven't seen the charge sheet as yet.

The fraud unraveled last December when Satyam announced the $1.6 billion acquisition of two affiliated construction companies, Maytas Infra and Maytas Properties, run by Raju's two sons. Raju claimed the acquisitions were a good diversification strategy, and announced they would go ahead without shareholder approval. Investigators say Raju actually wanted to buy the companies because they held many of the illicitly acquired properties; absorbing them into Satyam could have allowed Raju to cover up his misdeeds indefinitely. But many of Satyam's foreign stakeholders, who owned 47% of the Nasdaq-listed company, grew suspicious and angry over the deal and dumped the stock, sparking a 50% drop in the shares. Satyam canceled the acquisitions, and Raju, no longer able to hide the massive fraud, confessed three weeks later.

Since then, two auditors of Satyam's accounting firm, PricewaterhouseCoopers (PwC), have been sitting in an Indian jail, accused of abetting the scheme. Narayana, the CBI deputy director general, said there was evidence indicating their involvement but declined to elaborate. Following the release of the CBI report, a PwC spokeswoman declined comment; the accounting firms top India executive in March denied any of its employees were involved in wrongdoing.

Since dropping the Satyam account after the fraud came to light, PwC has been going all out to repair its reputation. Before his recent retirement, Samuel DiPiazza Jr., PwC International's former CEO, made frequent trips to India to meet clients and government ministers. Indian politicians have said that the government will take action against PwC if it is found liable, which could mean penalties or even ejection from India.

The CBI has concluded its investigation, but other federal agencies, including the Securities Exchange Board of India, are expected to step in and assist in identifying illicit assets acquired by Raju and his accomplices. In October, India's Enforcement Directorate attached about 280 properties owned by Raju and his extended family, which it said were obtained with embezzled funds. A senior government official says that more Satyam properties will be attached. More shoes will drop with a fraud of this magnitude, says Partha Iyengar, head of research at the India office of Gartner, the Connecticut-based I.T. research and advisory firm.

It's unclear whether Satyam's new owner, Tech Mahindra, will benefit as assets are identified and recovered. Tech Mahindra bought a 47.2% stake in the tainted company for $600 million in a government auction in April. If the fraud money reappears as assets in the name of the company, its good news for Tech Mahindra, which paid a huge sum for Satyam and its liabilities, says Suresh Talwar, partner at Mumbai-based law firm Talwar Thakore & Associates, Satyam's corporate counsel until 2006. It could be a bonanza for shareholders, too, in the form of dividends or bonus shares, he says. Judging by the scale of the fraud and India's lethargic judicial system, any windfall could still be a long way off.

• Nandini Lakshman / Mumbai
• Disgraced former chairman of Indian outsourcing giant cooked the books and embezzled millions to buy prime real estate in major cities, investigators say