ED seizes / freezes assets worth ₹1.20 crore in ₹168- crore bank fraud case

The ED's Mumbai unit raided locations linked to a ₹168 crore fraud by DMCSL. Assets worth ₹1.20 crore were seized. Funds were diverted for personal gains and sent to Hong Kong.

MUMBAI: The Mumbai zonal unit of the Enforcement Directorate (ED) conducted searches at various locations as part of its money-laundering probe into Dnyanradha Multistate Co-operative Society Limited (DMCSL) and a few others in connection with an alleged fraud case estimated to be worth around ₹168 crore. The agency froze / seized movable assets worth around 1.20 crore in the form of bank balances and demat holdings as well as incriminating documents and digital devices.

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The accused had allegedly duped multiple investors via a fraudulent deposit scheme, offering lucrative returns, and later diverted the funds collected by DMCSL for personal gains to create assets. Some of the funds were also siphoned off to Hong Kong, agency sources said. Barring a few cases in which only partial payments were made, in most cases no payment was made to investors on the maturity of their deposits, the sources added.

The agency conducted the searches on Friday in Navi Mumbai, Pune, Beed and Aurangabad at various locations as part of the probe against DMSCL, one of its controllers Suresh Kute and others.

The ED initiated its investigation based on multiple cases of fraud registered at various police stations in Maharashtra under the Indian Penal Code and the Maharashtra Protection of Investors (MPID). As per the cases registered and verified till date, the swindle with investors’ funds is tentatively worth around Rs.168 crore, agency sources said.

DMCSL was allegedly managed and controlled by a few persons like Kute, Yashvant Kulkarni and others. DMCSL had floated various deposit schemes and claimed to give interest ranging from 12 per cent to 14 per cent annually. The society had also floated various other schemes pertaining to personal loans, simple loans, salary loans, term loans, gold loans and FDR (Fixed Deposit Receipt)-based loans among others.

The ED investigation revealed that Kute and others under the scanner allegedly trapped gullible investors to deposit money with DMCSL by promising higher returns. “However, no payment, or only partial payments, were made to the investors when the deposits matured, resulting in them being cheated,” an ED source said. “Such investors’ funds were therefore embezzled by the management of the society by hatching a criminal conspiracy for their personal gains.”

The funds of DMCSL, which were collections from the depositors, were allegedly siphoned off by Kute and others to create several movable and immovable personal assets. The evidence relating to this has also been seized by the ED, the sources said.

The investigation revealed that the funds were allegedly diverted via various shell entities, by layering, before infusing them into the Kute Group of Companies as share capital/investment, the sources said. “Also, the investigation revealed that the funds of DMCSL were siphoned off to Hong Kong through layering by creating a web of shell entities,” the ED source said.