ED Cracks Down on Medical College Stipend Scam in Karnataka: Attaches Properties Worth Rs 85 Lakh
Bengaluru, September 8: The Enforcement Directorate (ED) took strong action against a shocking medical college stipend scam in Kalaburagi, Karnataka. On Monday, officials attached properties worth about Rs 85 lakh linked to the fraud at Mahadevappa Rampure Medical College (MRMC). This move aims to recover money stolen from PG medical students’ stipends.
The ED’s Mangalore Sub Zonal Office provisionally attached four immovable properties owned by Mallanna S Maddarki under the Prevention of Money Laundering Act (PMLA), 2002. The attachment happened on September 4, as part of their ongoing probe into the scam.
ED kicked off the investigation after Kalaburagi City Cybercrime, Economic Offences, and Narcotics (CEN) Police Station filed an FIR. The FIR targeted suspects including Bheemashankar Bilgundi, Dr. S M Patil, Subash, and even a Canara Bank manager, under various sections of the Indian Penal Code (IPC) 1860.
Searches under Section 17 of PMLA in April and May 2025, plus follow-up inquiries, uncovered the scam’s details. Bheemashankar Bilgundi, who was then President of the Hyderabad Education Society managing MRMC, worked with accountant Subashchandra Jagannath and office superintendent Mallanna S Maddarki. From 2018 to 2024, they siphoned off stipend funds meant for PG medical students’ bank accounts.
Here’s how they pulled it off: The accused collected blank signed cheques from students during admission. They later filled in the details and cashed them, pocketing a whopping Rs 33.34 crore in total. This left innocent students without their rightful stipends, causing major hardship.
In July 2025, ED had already attached Proceeds of Crime (POC) worth Rs 5.87 crore. This included immovable properties bought by Bilgundi in his sons’ names and several bank accounts. Now, they’ve gone after Maddarki’s properties since he helped handle the dirty money for the main accused.
The medical college stipend scam has raised serious questions about corruption in Karnataka’s education sector. ED says the investigation continues, and more actions could follow. Stay tuned for updates on this money laundering case.
