CBI CONDUCTS SEARCHES AT 15 LOCATIONS IN AN ON-GOING INVESTIGATION OF A SCAM

Press Release
New Delhi, 08.11.2019

The Central Bureau of Investigation has today conducted searches at 15 locations including 11 places at Bengaluru; 01 at Meerut and one each in the Districts of Mandya, Ramanagara & Belgaum at the residential premises of the then IG, Economic Offences Wing, CID; a Dy.SP, CID; the then Dy. Commissioner of Police(East); an Inspector & the then SHO, Commercial Street Police Station; the then SI of Commercial Street Police Station; the then Assistant Commissioner, Bengaluru North Sub-Division; the then Deputy Commissioner, Bengaluru Urban District; a Village Accountant, Bengaluru North Sub Division and the then Chief Engineer, BDA, Bengaluru in an on-going investigation of a scam. During searches, various incriminating documents, property documents, material objects and digital evidences have been recovered.

It was alleged that these public servants have conducted enquiries against the private Group entities, furnished favourable reports and given clean chits to the entities of said private Group. As a result, no action was allegedly initiated against the said private company and the fraud continued unhindered due to the clean chit reports given by these officers. The RBI has repeatedly flagged the issue about unauthorised collections and raising of deposits by the said private Group at the State Level Coordination Committee meetings and had also written several letters to various authorities in the State of Karnataka. Based on these letters from RBI, enquiries were conducted through the said officers. These officers have allegedly failed in their duties in pointing out the glaring irregularities committed by the said group and gave clean chits. Investigation into the expenditure statements of the said private Group has revealed the alleged payments of huge bribe amounts on multiple occasions by the Directors of the said Group to these officials.

CBI had registered a case on 30th August, 2019 in connection with a scam related to Bengaluru & other areas on the request of the Karnataka Government and further Notification from the Government of India and had taken over the investigation of the case, earlier registered by Karnataka Police. It was alleged that the founder Director of the Group of Entities based at Bengaluru had illegally collected deposits from the public in the form of investments on various Ponzi schemes such as Monthly Plan, Education Plan, Marriage Plan, etc., with a promise of getting high returns. It was further alleged that the accused persons widely propagated through media, advertisements, religious scholars and others. It was also alleged that the money collected as deposits / investments were not used for any genuine business activities, instead the accused rotated a portion of deposits to distribute among the investors in the guise of profits. Most of the deposits were allegedly misappropriated by the accused for acquiring assets on their personal names and names of family members. The accused allegedly paid huge sum of bribes to public servants and others as protection money to carry out their illegal activities.

After taking over the case, CBI had formed a 12-Member Multi Disciplinary Investigation Team(MDIT) comprising of its investigators who are being assisted by Chartered Accountants, Forensic Auditors, Computer Forensic Experts, Bankers and officials from various other regulatory departments.

CBI has already filed two chargesheets in this case against the accused persons including the Managing Director, Directors, Members, Auditor, Private Group companies based at Bengaluru and private persons in the Designated Court at Bengaluru.

Further investigation is continuing.

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