Hyderabad: Hyderabad-based First Finance Credit Cooperative Bank (FFCCSL) Limited emerged as a vital cog in the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL), revealed the Enforcement Directorate (ED) Bangalore investigation. The FFCCSL’s fictitious bank accounts acted as a vessel to hold and transfer the embezzled money in an attempt to obscure its trail.  Further, the agency has seized movable property to the extent of Rs. 50 lakh (approx.) in the form of bank accounts of FFCCSL.

The ED investigation revealed that funds pooled amounting to Rs. 89.63 Crore into the KMVSTDCL's account were routed to 18 fake bank accounts opened with First Finance Credit Cooperative Bank Limited in Hyderabad. These fictitious bank accounts acted as a channel to divert funds, which were then layered through fictitious and shell accounts to obscure the money trail. Further, the cash and bullion were split among the accused.

ED Bengaluru Zonal Office has provisionally attached properties, in the form of immovable properties and bank balance, to the extent of Rs. 5 Crore (approx.) under the provisions of PMLA, 2002 in the case of Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) on Wednesday.

The attached immovable properties are in the form of land and flats worth Rs. 4.45 Crore belonging to First Finance chairman Etakeri Satyanarayana, Nekkenti Nagaraj, Chandra Mohan, and Golapalli Kishore Reddy, and movable property is in the form of bank accounts to the extent of Rs. 50 Lakh (approx.) in First Finance Credit Cooperative Bank Limited.

Anti-money laundering investigation agency started a probe based on the FIRs registered by the Karnataka Police and CBI after the tragic suicide of KMVSTDCL employee Chandrashekhar on 26.05.2024, wherein it is alleged that the accused persons fraudulently transferred the money from the account of the KMVSTDCL and misappropriated the funds with the intent to cheat and defraud the Corporation of public money amounting to Rs. 89.63 crore by forging the valuable securities and documents.

Stolen funds used for Elections, Lamborghini purchases: ED

“Investigation revealed that KMVSTDCL's account was channelled to a new fraudulently opened account at the MG Road branch of Union Bank of India in collusion with bank officials. Subsequently, funds from other accounts and the treasury were amassed into this account. From the pooled funds, an amount of Rs. 89.63 Crore was 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,” said the ED in a statement. Further, the central agency added that the diverted funds were then layered through fictitious and shell accounts, with cash and bullion distributed among the accused.

Further investigation by the ED uncovered 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 persons out of the siphoning off funds from the account of the Corporation have been utilised by them for personal purposes. Therefore, properties in the form of immovable properties and amounts available in the bank accounts of accused persons/entities, to the extent of Rs. 5 crore (approx.), have been attached. Further investigation is under progress, added ED.