ED Traces ₹75 Crore in Assets Linked to ₹450 Crore Bank Fraud Probe

The Enforcement Directorate (ED) has intensified its investigation into an alleged ₹450 crore bank fraud case by conducting searches across Uttar Pradesh, Delhi, and Punjab, leading to the recovery of property documents valued at around ₹75 crore. The agency suspects that the assets may be linked to proceeds generated from a large-scale loan fraud involving a consortium of banks.

The searches were carried out by the ED’s Lucknow Zonal Office at multiple locations connected to Santosh Overseas Limited, a Bulandshahr-based company under investigation in a money laundering case. The probe originated from allegations raised by a consortium of banks led by IDBI Bank.

Investigation Traces Alleged Fraud Back to Fake Purchase Order

The case dates back to a Central Bureau of Investigation (CBI) investigation registered in 2020 against Santosh Overseas Limited and its director Sunil Mittal over alleged financial irregularities.

Investigators had accused the company of obtaining packing credit facilities from a seven-bank consortium based on a suspected fake purchase order issued by an associated entity. The company was also alleged to have maintained accounts with other banks outside the lending consortium and routed business proceeds through those accounts without informing the lenders.

According to investigators, this arrangement allegedly prevented banks from accurately assessing the company’s actual financial position and cash flow movements.

The initial CBI case involved allegations of fraud of approximately ₹424 crore, while the ED’s ongoing money laundering investigation has placed the suspected financial irregularities at nearly ₹450 crore after further examination of financial records.

Property Assets Under ED Scanner

During the recent searches, the ED reportedly recovered property-related documents worth about ₹75 crore. The agency stated that these assets were registered in the names of family members of the accused directors and entities allegedly connected with them.

Investigators are now examining whether these properties were purchased using funds allegedly diverted from bank loans. If the assets are established as proceeds of crime, the ED may initiate attachment proceedings under the Prevention of Money Laundering Act (PMLA).

Officials are also analyzing ownership structures and financial links to determine the extent of involvement of individuals and entities connected with the suspected transactions.

Digital Evidence and Financial Records Examined

Apart from property documents, the searches resulted in the seizure of approximately ₹10.5 lakh in cash, electronic devices, and financial records. The ED said the seized material will undergo detailed forensic examination to trace the movement of funds between bank accounts, companies, and individuals.

Investigators are expected to compare the recovered data with banking records, corporate filings, and other financial documents already collected during the probe.

The analysis could help authorities identify additional beneficiaries or persons who may have benefited from the alleged diversion of loan funds.

Probe Continues Across Multiple States

The ED has not disclosed the complete list of individuals and entities covered during the searches, citing the ongoing nature of the investigation.

Officials said further action, including additional searches, attachment of suspected proceeds of crime, or legal proceedings against other persons, will depend on findings from the seized documents and digital evidence.

The case highlights the challenges faced by investigative agencies in tracking large-scale financial frauds where funds are allegedly moved through multiple entities before being converted into assets such as land and property.