Rs 15 cr siphoned off in Valmiki ‘scam’ distributed to influence voters in 2024 LS polls: ED chargesheet

NEW DELHI: A total of Rs 15 crore of the Rs 89.63 crore funds siphoned off in the alleged Maharshi Valmiki Scheduled Tribe Development Corporation scam by former minister Nagendra and his aides was allegedly used “during the 2024 Lok Sabha election expenditures to influence voters” and some significant portion of the amount for personal expenses, according to the Enforcement Directorate’s chargesheet.

Significant amounts were channeled towards election campaigns under the direction of Nagendra, and the cash was distributed to party workers and voters in constituencies like Ballari, Kudligi and Kampli, the chargesheet stated. As per the chargesheet filed in a special court in Bengaluru, cash was distributed to polling stations in constituencies, with each voter receiving Rs 200 and each polling booth Rs 10,000.

“This involved over Rs 15 crore distributed to influence voters”, it said. Additional funds were deposited into personal accounts linked to Nagendra’s associates, including Punith Kumar and Kali Harish, for personal expenses such as flight bookings, vehicle maintenance and salaries for household staff, stated the chargesheet.

“The investigation traced a detailed money trail from the initial siphoning of Rs 187.33 crores to its final destinations. The funds were funneled through a network of fake accounts, shell companies and accomplices, ultimately converted into cash, gold and assets, with substantial portions used for personal expenses and election-related activities. Despite partial recovery, the investigation continues to unravel the full extent of the scheme”, said the ED chargesheet.

The chargesheet mentioned that the investigation into Karnataka Maharshi Valmiki Scheduled Tribes Development Corporation Limited (KMVSTDCL) uncovered a sophisticated money-laundering operation that misappropriated over Rs 187.33 crore, originally allocated for welfare schemes. The funds were siphoned off through a series of layered transactions, using fake entities and fraudulent bank accounts, between March and May 2024, stated the chargesheet.

The investigation revealed that on Nagendra’s directive, Rs 187 crore from KMVSTDCL accounts were consolidated into a single account at Union Bank’s MG Road branch. Subsequently, as per the chargesheet, Rs 89.63 crore were siphoned off using forged documents and fake accounts.

“A significant portion of these funds was used for election expenditures and personal expenses. Mobile phone records of Nagendra indicated the disposal of three handsets during the scam, suggesting an attempt to destroy evidence. Search and seizure operations under the PMLA between July and August 2024 further revealed the fraudulent nature of the entire operation”, the chargesheet said.

The KMVSTDCL, founded in 2006 and based in Bengaluru, is dedicated to improving the socio-economic status of Scheduled Tribes (ST) in Karnataka. It offers welfare schemes such as self-employment loans, micro credit, land purchase assistance and irrigation facilities. The corporation is governed by a Board of Directors (BoD) chaired by the Managing Director (MD), with oversight from departments like Social Welfare, Finance, and Planning.

After the suicide of an employee, Chandrashekhar, and based on his death note, an FIR was filed and investigations revealed the extent of the scam involving KMVSTDCL. The money laundering case originated from an FIR filed by the Karnataka police and the CBI, which claims that several crores of rupees were misappropriated from the accounts of the Karnataka Maharshi Valmiki ST Development Corporation. These funds were allegedly transferred to “fake accounts” and subsequently laundered through shell companies

.In its key findings, mentioned in the chargesheet, ED said on February 21 this year, the Corporation’s account was moved from Vasant Nagar to the MG Road branch of Union Bank of India on oral orders from B Nagendra. “Funds totaling Rs 187.33 crore were transferred between March 4, 2024, and May 21, 2024. A total of Rs 89.63 crore were siphoned from the Corporation’s accounts into fake accounts opened in RBL Bank’s Banjara Hills branch, controlled by First Finance Credit Cooperative Society Limited”, mentioned the chargesheet. (ANI)