Valmiki scam: ED attaches assets worth Rs 5 crore

The Enforcement Directorate (ED) has provisionally attached assets worth Rs 5 crore under the provisions of the Prevention of Money Laundering Act (PMLA) in connection with the alleged scam at the Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL).

In a statement released on Wednesday, the agency said that the attached assets belonged to Nekkenti Nagaraj, Chandra Mohan, Golapalli Kishore Reddy, Etakeri Satyanarayana and First Finance Credit Cooperative Bank Limited.

The ED stated that Nagaraj was the personal assistant of former Congress minister B Nagendra, who was arrested last year by the Central agency, and Satyanarayana was the legislator’s key aide.

“The attached immovable properties are in the form of land and flats worth Rs 4.45 crore belonging to Nekkenti Nagaraj, Chandra Mohan, Golapalli Kishore Reddy, Etakeri Satyanarayana, and movable property is in the form of bank accounts to the extent of Rs 50 Lakh (approx.) in First Finance Credit Cooperative Bank Limited,” according to ED’s statement.

The ED initiated an investigation based on FIRs registered by the Karnataka Police and the CBI after the suicide of KMVSTDCL employee Chandrashekhar on May 26, 2024. It was alleged that the accused persons illegally transferred the money from the account of the KMVSTDCL and misappropriated the funds with the intent to cheat and defraud the Corporation of public money amounting to Rs 89.63 crore by forging the valuable securities and documents.

“ED investigation revealed that KMVSTDCL’s account was transferred to a new fraudulently opened account at the MG Road branch of Union Bank of India in collusion with bank officials. Subsequently, funds from other accounts and the treasury were pooled into this account. From the pooled funds, an amount of Rs 89.63 crore was diverted from this fraudulently opened Corporation’s account to 18 fake bank accounts opened with First Finance Credit Cooperative Bank Limited in Hyderabad, in connivance with the bank’s Chairman,” the agency said.

“The diverted funds were then layered through fictitious and shell accounts, with cash and bullion distributed among the accused. Further investigation by the ED uncovered that a significant portion of these funds was used in the general elections. Additionally, luxury vehicles, including a Lamborghini, were bought using proceeds from the scam. These facts were corroborated by the accommodation entry providers, bullion traders, gift card traders and luxury car dealers,” it added.

The agency said that the Proceeds of Crime acquired by the accused out of the siphoning off funds from the account of the Corporation have been utilised by them for personal purposes. “Therefore, properties in the form of immovable properties and amount available in the bank accounts of accused persons/ entities, to the extent of Rs 5 crore (approx.) have been attached vide PAO No.22/2025. Further investigation is in progress,”
the ED said.