ED Raids 14 Locations in ₹650 Crore Bank Fraud Probe

The Enforcement Directorate (ED) has conducted searches at 14 locations across Chandigarh, Mohali and Panchkula as part of its money-laundering investigation into the alleged diversion of around ₹645 crore in public funds.

The operation targeted several jewellers, associated business entities and an alleged intermediary suspected of helping route and layer the funds through multiple bank accounts. Investigators examined financial records and other documents as they continued tracing the alleged money trail.

What Is the ₹645 Crore Bank Fraud Case?

The investigation stems from allegations of irregularities involving government accounts maintained with IDFC First Bank and AU Small Finance Bank.

According to the ED, the alleged embezzlement involved funds belonging to the Haryana government, the Chandigarh administration and other government entities. The agency’s money-laundering case was initiated after an FIR was registered in February 2026 concerning discrepancies in accounts associated with the Haryana Development and Panchayats Department.

The investigation has since expanded beyond the original banking transactions, with agencies examining how the allegedly diverted money was moved through different companies, accounts and business transactions.

Which Premises Were Searched?

The ED’s searches covered several jewellery businesses and entities across the Chandigarh-Mohali-Panchkula region.

Premises linked to Malik Jewellers, KLG Jewels and associated entities, M.B. Gold Traders, Sham Jewellers and Sunder Jewellers were among those searched. The agency also targeted premises connected with Gourav Kansal, who has been described by investigators as an alleged intermediary involved in routing and layering the suspected proceeds of crime.

During the operation, investigators examined documents, bank-account records and other financial material. People connected with some of the transactions were also reportedly questioned.

How Were the Alleged Funds Routed?

The ED’s investigation is focused on allegations that public money was transferred through various accounts and subsequently routed through jewellery businesses.

Investigators allege that some of these transactions were presented as ordinary commercial dealings even though they were allegedly connected to diverted government funds. The agency is examining whether such transactions were used to conceal the original source of the money and make the funds appear legitimate.

Earlier investigation has also indicated that substantial amounts were allegedly converted into cash through transactions involving gold. A separate CBI investigation had alleged that more than ₹329 crore was routed through shell entities to a Chandigarh-based jeweller and converted into cash through purported gold transactions. These are allegations made during the investigation and remain subject to judicial proceedings.

Were Government Officials Linked to the Case?

The investigation has also widened to government officials and bank personnel.

The CBI has separately investigated alleged collusion involving bank officials and Haryana government officials. Its investigation has named six Haryana-cadre IAS officers, along with other government servants, in connection with the alleged bank fraud.

The ED is examining whether allegedly diverted funds were eventually transferred to officials or other beneficiaries. The agency’s investigation is focused on establishing the complete financial trail rather than simply identifying the accounts through which the money initially moved.

The allegations against individuals named in the investigations have not been treated as convictions unless established by a court.

ED Has Already Attached Assets Worth ₹211 Crore

The latest searches follow several earlier actions in the case.

According to reports, the ED has already attached or seized assets worth approximately ₹211 crore during its investigation. The agency has also arrested several people and filed a prosecution complaint against multiple entities in connection with the money-laundering probe.

The ED had also arrested Naresh Kumar, a former superintendent in the office of the Director, Development and Panchayats, Haryana, in June 2026. The agency alleged that he received funds from a shell entity and acted as an intermediary in the alleged diversion of public money.

Real Estate Transactions Also Under Scrutiny

The ED’s activity in Mohali has also extended to the real estate sector.

The agency reportedly examined premises connected with real estate businesses and documents involving Change of Land Use (CLU) matters and suspected financial irregularities. Searches were also reported at premises associated with Mohali City Centre.

Investigators are examining whether property-related transactions have any financial connection with the alleged movement or laundering of funds in the wider case.

CBI and ED Following Separate Parts of the Investigation

The CBI and ED are investigating different aspects of the broader financial case.

While the CBI is examining the alleged bank fraud, diversion of government funds and possible involvement of officials and bank employees, the ED’s investigation under the Prevention of Money Laundering Act (PMLA) is focused on tracing and identifying the alleged proceeds of crime and how they were transferred or concealed.

The latest searches are intended to help investigators establish links between bank transactions, businesses, intermediaries and potential beneficiaries.

What Happens Next?

The ED is expected to analyse the documents, banking records and other material gathered during the searches before determining its next course of action.

The central question for investigators remains the complete trail of the allegedly diverted funds—where the money originated, through which accounts and businesses it moved, and who ultimately benefited from it.

As the CBI and ED investigations continue, further arrests, asset-attachment actions or prosecution proceedings could follow if investigators establish additional links. However, the allegations against individuals and businesses remain subject to investigation and judicial proceedings.