Mithi desilting fraud: ED records statements of 5 civic officials, contractors

Those whose statements were recorded included BMC engineer P Ramgude, civic contractor B Purohit and other civic officials and contractors

MUMBAI: The Enforcement Directorate (ED) this week recorded the statements of five persons as part of its money-laundering investigation into the alleged alleged fraud in desilting of the Mithi River, which caused a loss of over ₹65 crore to the Brihanmumbai Municipal Corporation (BMC).

Representative Image (Hindustan Times)

Those whose statements were recorded included BMC engineer P Ramgude, civic contractor B Purohit and other civic officials and contractors, ED sources told Hindustan Times. Last week, the agency had recorded the statements of actor Dino Morea and his brother Santino Morea in the case.

The ED’s probe into the alleged fraud is at a preliminary stage and it is currently analysing the contents of all the statements recorded under the Prevention of Money Laundering Act (PMLA), sources said. The agency can seek further clarifications if required, the sources added.

Earlier, on June 6, the ED carried out searches at 18 locations across Mumbai, Kochi and Thrissur in connection with the alleged desilting fraud. The locations searched included the residential and/or office premises of Dino and Santino Morea, Ramgude, Purohit, alleged intermediaries Jay Joshi and Ketan Kadam, and Matprop Technical Services Pvt Ltd, a Kochi-based company that rented out machinery and equipment for the desilting work.

Cash worth ₹7 lakh was seized and 22 bank accounts/fixed deposits and a demat account were frozen during the searches.

The ED is investigating if the Moreas were involved in the alleged fraud or linked to the proceeds of crime generated by other accused. The brothers have denied all allegations of their involvement in the case.

The ED’s probe is based on a case registered in May by the Economic Offences Wing (EOW) of the Mumbai police. The EOW had booked 13 people/ entities in the case, including three BMC officials, and it had questioned the Morea brothers last month.

On June 7, the ED had said that its investigation and search operations prima facie indicated that the accused and others colluded to form a cartel with the intent of manipulating BMC’s tenders related to the desilting of Mithi River.

“This action effectively conferred a monopoly in [the] award of desilting contracts of Mithi River and caused payments at inflated rates for desilting works, resulting in undue gains to the contractors and associated parties, thereby causing financial loss to the public exchequer,” the agency had said in a statement.

The accused persons and entities and their associates concealed the undue financial gains by layering them through some shell companies, the agency had said.

So far, the total amount seized or frozen in the case was over ₹1.25 crore, ED sources said. Certain digital devices and incriminating documents that appeared to be relevant for further proceedings under the PMLA have also been seized, the sources added.