Bengaluru: The Directorate of Enforcement (ED) has provisionally attached immovable and movable properties worth ₹5 crore in connection with the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDC) scam. The attached assets include land, flats, and bank balances linked to accused individuals Nekkenti Nagaraj, Chandra Mohan, Golapalli Kishore Reddy, and Etakeri Satyanarayana, along with deposits worth ₹50 lakh in First Finance Credit Cooperative Bank Limited.
ED Action Based on Employee’s Suicide Case
The ED action stems from FIRs registered by the Karnataka Police and the CBI following the suicide of KMVSTDC employee Chandrashekhar on May 26, 2024. Investigators allege that officials fraudulently diverted ₹89.63 crore of public money from KMVSTDC accounts by forging documents and securities, in collusion with bank officials.
Fraudulent Transfers and Shell Accounts
According to the probe, the diverted funds were routed through a fraudulently opened account at Union Bank of India’s MG Road branch. Later, the money was layered across 18 fake accounts at First Finance Credit Cooperative Bank Limited in Hyderabad. The funds were then moved into fictitious shell accounts, eventually reaching bullion traders and luxury car dealers.
Funds Used for Elections and Lavish Purchases
Investigations revealed that a large portion of the siphoned funds was misused during general elections. The accused also spent money on luxury items, including high-end cars like a Lamborghini. Accommodation entry operators, bullion traders, and car dealers corroborated the transactions, confirming the laundering trail.
Proceeds of Crime Attached
The ED confirmed that the Proceeds of Crime were diverted for personal expenses of the accused. As a result, assets worth ₹5 crore—land, flats, and bank accounts—have been provisionally attached under PAO No. 22/2025.
Officials said, “The scam demonstrates a systematic conspiracy to defraud KMVSTDC and misuse public funds meant for Scheduled Tribes’ welfare. Further investigation is in progress.”
