Transactions around Rs 150 crore under ED scanner in Nagpur and Mumbai

NAGPUR: The transactions worth around Rs 150 crore are under the scanner of the Enforcement Directorate (ED) which had conducted 13 ‘searches and surveys’ in Nagpur and two in Mumbai on Friday pertaining to the illegal laundering of money accumulated through an alleged financial fraud.
The agency, which issued a press statement after three days of the actions for reasons best known to them, has underlined that the various transactions to different bank accounts worth around Rs150 crore were done to ‘divert’ the money and give it a ‘legal tinge transactions’ to avoid the scanner of financial regulators and enforcement agencies.
The actions were carried out following an ongoing investigation under Prevention of Money Laundering Act (PMLA), 2002 relating to the alleged investment fraud of Pankaj Mehadia and his close aides.
ED has revealed that searches were conducted at the residences and offices of Pankaj Mehadia, Lokesh Jain and Karthik Jain, who are the main accused of this alleged scam and also on the office and residential premises of some of the key beneficiaries.
ED had initiated PMLA investigation based on the predicate FIR registered at Sitabuldi police station against Mehadia, Lokesh Jain, Kartik Jain, Balmukund Keyal and Premlata Mehadia in a fraud causing loss to investors in crores of rupees.
The PMLA investigation revealed that Mehadia along with other accomplices were running a Ponzi scheme and lured various investors by promising to give 12% assured profit after deducting TDS on the investments made from the year 2004 to 2017. Throughout the period of 2005 to 2016, with the malafide intentions of cheating and siphoning off the investors’ money, the accused persons ran the Ponzi scheme giving assured returns to win over the investors and thus luring the investors to invest in larger amounts in the associated firms/companies and ultimately did not return the money.
In order to divert the money and to give the transactions a tinge of legitimacy, transactions worth more than Rs150 crore have been affected in the bank accounts and it is suspected that most of these transactions are not backed by genuine business deals and are in the nature of accommodation entries.
The ED press note also mentions about suspicion that most of such transactions are not backed by genuine business deals and are in the nature of accommodation entries. Accommodation entries are mode to show unaccounted funds as legitimate.
Sources said here is where the PMLA was attracted. The funds for the alleged Ponzi scheme were received in cheque. The same amount was remitted over to a number of parties as loans again through cheque keeping it perfectly legal. However, there is a likelihood of similar amount cash also being received from these parties in lieu the cheque. “These parties showed such amounts as unsecured loans in their books. Later when these loans were repaid again through a cheque, an amount cash is suspected to have back to the borrowers. All happened for a cut,” said sources.
ED also seized gold and diamond jewellery worth Rs5.51 crore, cash of approximately Rs1.21 crore, digital devices and various incriminating documents etc. during the actions.