The Central Bureau of Investigation arrested two more officials and a businessman on Friday morning in connection with the Rs 8000-crore National Rural Health Mission scam.
The three arrests were made at the CBI headquarters, where the accused were brought a day earlier for interrogation.
P K Jain, former general manager of Uttar Pradesh Jal Nigam Construction and Design, was arrested on Thursday shortly after he was questioned by CBI sleuths in New Delhi .
Those taken into custody by the CBI on Friday include former UP health and family welfare director general S P Ram, UP Small Industries Corporation general manager Abhay Kumar Bajpai and Moradabad based-businessman Sourav Jain, who was involved in supplying medical equipment and medicines under the NRHM programme.
Ousted minister Babu Singh Kushwaha, who has been linked to the scam, is roaming around scot-free.
The arrests came a day after the agency carried out inter-state searches at about 60 locations in UP, Haryana and Delhi, including the residence of Kushwaha and his close associates, in an effort to unravel the NRHM scam.
"Apart from a lot of incriminating documents seized from the possession of these persons, leading evidence has been gathered during the course of interrogation of these four persons", claimed a CBI source.
"There were glaring incidences of heavy over-invoicing," he said
The source added, "The owner of the private firm who was arrested this morning had suddenly become a medical supplier after having spent years selling construction material."
He said, "It was surprising that within days of getting his firm registered as a medical equipment and drug supplier, he bagged contracts for supply of such material worth crores and that too at highly inflated prices."
CBI sleuths believe that the transactions carried out between Jain and NRHM bosses involve huge kickbacks.
The source was silent on the question of arresting former UP family welfare minister Kushwaha.
"We are still collecting more evidence against the former minister and some of his close associates who clearly appear to be direct beneficiaries of the suspected kickbacks," the source added.
Another politician on the CBI's radar is former health minister Anant Kumar Misra , who is closely related to UP chief minister Mayawati's close confidante Satish Chandra Misra.
Misra too was asked to tender his resignation along with Kushwaha in April last year, when the NRHM scam rocked the ruling government.