The Directorate of Enforcement (ED) conducted search operations on June 27 in Bengaluru and Mandya, Karnataka, under the provisions of the Prevention of Money Laundering Act, 2002 (PMLA). The searches were carried out at five locations belonging to Hindustan Infracon India Ltd. and related persons in connection with a Ponzi Scheme fraud case.
The ED initiated the search operations based on a case of money laundering filed by the Vijayanagar Police Station in Bengaluru. The case was registered against Hindustan Infracon India Ltd. and its promoters/directors under various sections of the Indian Penal Code (IPC) for allegedly cheating investors and the general public of approximately Rs 191.54 crore ($25.6 million).
During the investigation, the ED discovered that the promoters/directors of M/s Hindustan Infracon India Ltd. lured prospective investors by offering high interest rates on different investment schemes. However, they failed to return the deposits and interest due to the investors, resulting in significant financial losses.
Hindustan Infracon India Ltd. had collected approximately Rs 389 crore ($52 million) from around 7.18 lakh investors. However, they failed to repay approximately Rs 199 crore ($26.7 million) to the investors, thereby deceiving them and causing substantial monetary harm.
The search operations conducted by the ED led to the seizure of incriminating documents and records of cash transactions. Additionally, they uncovered evidence of the diversion of illicit funds into the purchase of various immovable properties. The relevant documents related to these transactions were also seized.
The investigation into this case is still ongoing, and the ED is working diligently to gather further evidence and information.
The search operations conducted by the ED under the PMLA are part of their efforts to combat money laundering activities and bring those involved in financial frauds to justice. By seizing crucial documents and uncovering illegal transactions, the ED aims to uncover the truth behind the Ponzi Scheme fraud case and hold the responsible parties accountable for their actions.
It is important for investors and the general public to exercise caution and conduct thorough due diligence before investing their hard-earned money. Scams and fraudulent schemes can cause significant financial losses and distress. By remaining vigilant and informed, individuals can protect themselves from falling victim to such fraudulent activities.
Overall, the search operations conducted by the ED in Karnataka serve as a crucial step towards unraveling the complex web of financial fraud and ultimately ensuring justice for the affected investors. The ED remains committed to its mission of combating money laundering and financial crimes, and will continue its efforts to safeguard the interests of the public.
