The Enforcement Directorate (ED) introduced on Sunday that it has arrested the previous basic supervisor of the Karnataka Bhovi Growth Company (KBDC) on fees of misappropriating funds to the tune of practically Rs 100 crore.
The accused, B Okay Nagarajappa, was arrested below Part 19 of the Prevention of Cash Laundering Act (PMLA) and introduced earlier than a particular court docket in Bengaluru, which granted the ED 14 days of custody for additional interrogation. Nagarajappa’s arrest adopted in depth searches in a number of places in Bengaluru, together with the KBDC workplace at VV Towers.
The ED has claimed that the search operations led to the seizure of incriminating paperwork, digital proof, and property information linked to laundered cash.
The KBDC rip-off allegedly concerned the misuse of funds meant for beneficiaries from the Bhovi group. A number of FIRs associated to fund misuse registered in Siddapura, Doddaballapur, and Kalagi had been consolidated and handed over to the Felony Investigation Division (CID) for probe earlier this yr. Later, the ED began investigating the cash laundering angle of the rip-off.
The rip-off got here to mild in 2021-22 when banks started issuing reimbursement notices to unsuspecting beneficiaries.
In keeping with the ED, Nagarajappa performed a central position within the fraud. Working in collusion with brokers, he allegedly used faux beneficiary accounts to divert funds. These funds had been then laundered by means of shell entities registered within the names of his associates, ultimately ending up within the financial institution accounts of his associates and relations.
The KBDC was established in 2016 for the event of the Bhovi group, which is a Scheduled Caste group within the southern state.
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