The Directorate of Enforcement (ED), Bengaluru Zonal Office, has provisionally attached properties, in the form of immovable properties and bank balance, worth Rs 5 crore under the provisions of the Prevention of Money Laundering Act (PMLA) in the Valmiki Corporation Valmi scam case, in which two aides of former Karnataka minister B Nagendra are allegedly involved.
ED stated on Wednesday that the attached immovable properties are in the form of land and flats worth Rs 4.45 crore belonging to Nekkenti Nagaraj, Chandra Mohan, Golapalli Kishore Reddy, Etakeri Satyanarayana, and movable property is in the form of bank accounts to the extent of Rs 50 lakh in First Finance Credit Cooperative Bank Limited. Nagaraj was identified as the personal assistant of Nagendra, while ED had mentioned Etakeri Satyanarayana as his “key associate”.
The scam in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) came to light after an officer died by suicide on May 26, 2024, alleging pressure from a minister to divert funds. The ED’s chargesheet in the case named Nagendra as the mastermind behind the scam.
ED initiated an investigation based on the cases registered by the Karnataka Police and the Central Bureau of Investigation (CBI).
It was alleged that the accused people illegally transferred the money from the account of KMVSTDCL and misappropriated the funds to defraud the Corporation of public money worth Rs 89.63 crore by forging valuable securities and documents.
ED investigation revealed that KMVSTDCL’s account was transferred to a fraudulently opened account at the MG Road branch of Union Bank of India in collusion with bank officers. Subsequently, funds from other accounts and the treasury were pooled into this account.
From the pooled funds, Rs 89.63 crore was allegedly diverted from this fraudulently opened Corporation’s accounts to 18 fake bank accounts opened with First Finance Credit Cooperative Bank Limited in Hyderabad, in connivance with the bank’s chairman. The diverted funds were then allegedly layered through fictitious and shell accounts, with cash and bullion distributed among the accused.
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ED said that a significant portion of these funds was used in the general elections. Additionally, luxury vehicles, including a Lamborghini, were bought using proceeds from the scam. These facts were corroborated by the accommodation entry providers, bullion traders, gift card traders, and luxury car dealers.
Moreover, the Proceeds of Crime acquired by the accused out of the siphoning off of funds have been utilised by them for personal purposes. Further investigation is in progress.
Last year, ED arrested Nagendra, who was the minister for Scheduled Tribes Development, for allegedly misappropriating the Corporation’s funds.