ED Cracks Down on Fraud: Attaches Property Worth Rs 75 Lakh in Karnataka Handicraft Scam
Bengaluru’s Enforcement Directorate (ED) has taken a big step in a money laundering case linked to the Karnataka State Handicraft Development Corporation Limited (KSHDCL). The ED’s Bengaluru Zonal Office provisionally attached immovable property worth Rs 75 lakh belonging to Velohar Infra Private Limited. This action falls under the Prevention of Money Laundering Act (PMLA), 2002, after uncovering how government funds got siphoned off through shady dealings.
The investigation paints a clear picture of the fraud. Crooks diverted a whopping Rs 3.74 crore from KSHDCL’s accounts to Venture Cottage Industrial Trade Corporation at Allahabad Bank in Chennai. They then pulled out the cash and pocketed it, leaving no trace.
At the heart of this scam were key players like Sateesh V Vambashe, a bank official, along with J.R. Pradhan, Mohammed Rafi, Mohammed Aboobacker, and Sarath Chandran. They teamed up to open two fake current accounts in KSHDCL’s name at the SBI Hesaraghatta Branch. To pull this off, they used forged resolutions and fake authorization letters.
Once the accounts were set up, Rs 5.01 crore of KSHDCL’s money flowed into them. The fraudsters didn’t stop there. They parked just Rs 25 lakh in a real fixed deposit (FD). But to cover their tracks, they created a bogus fixed deposit receipt (FDR) for the full Rs 5.01 crore and handed it over to KSHDCL, hiding the theft.
From the remaining funds, Rs 1 crore went straight to Velohar Infra Pvt. Ltd. in Chennai. Another Rs 3.74 crore landed in the Venture Cottage account, where it vanished as cash withdrawals.
Digging deeper, the ED found that on July 30, 2018, three RTGS transfers from KSHDCL’s SBI account pushed Rs 1 crore into Velohar’s books. Out of this, Rs 25 lakh came out as cash and went to one of the accused. The rest—Rs 75 lakh—got spent by the company and its director, Vijayalakshmi S, on personal and business needs. Even though they knew the money was dirty proceeds of crime (PoC), they used it anyway.
Velohar Infra owns a 32.55-cent plot in "Sunrise Avenue," Sholinganallur village, Kancheepuram district, bought for Rs 3.80 crore. Now, the ED has attached Rs 75 lakh worth of this property under Section 5(1) of PMLA, 2002, to stop the laundered funds from slipping away.
The probe into this money laundering case continues, with more details expected to emerge. Stay tuned for updates on this Karnataka fraud bust.
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