CHENNAI: The Enforcement Directorate(ED) arrested two persons in a money laundering case linked to an investment fraud that allegedly mobilised around Rs 1,417.86 crore from 35,759 investors, according to the agency.
The two, identified as S Naveen Kumar and S Muthuselvam, were arrested on Tuesday under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. They were produced before the Special Court, PMLA, which granted them 15 days’ judicial custody, the ED said in a release on Thursday.
The ED investigation began based on an FIR registered by the District Crime Branch, Erode, under various provisions of the IPC and the Tamil Nadu Protection of Interests of Depositors (in Financial Establishments) Act.
According to the ED, Naveen Kumar, Muthuselvam and their associates devised and operated investment schemes named UNI, FNP, FAP and UNR under the banner of Unique Exports, East Valley Agro Firms and other related entities. Investors were allegedly induced to invest by promising high returns from agricultural goods exports. However, the entities did not undertake any substantial exports but continued to collect money from investors on the promise of high returns against export profits.
The investigation revealed that around Rs 1,417.86 crore was mobilised from about 35,759 investors. Around Rs 719 crore was found deposited in various bank accounts of entities related to Unique Exports. Investor funds were routed through more than 100 bank accounts held in the names of Unique Exports, associated concerns, family members and close associates.
Naveen Kumar, proprietor of M/s Unique Exports, was allegedly the mastermind behind the investment schemes and controlled the banking operations and movement of investor funds. Banking analysis showed that around Rs 390.90 crore was recorded as salary payments, although only four persons worked in the concern. Another Rs 79.56 crore was recorded as onion and commodity purchases without any actual purchase of agricultural goods, the ED said.
Muthuselvam allegedly played a central role in devising and operating the schemes, mobilising investors and routing funds. Against an investment of around Rs 42.10 lakh, he received around Rs 12.72 crore as returns, commission, referral benefits and other payments, according to the ED. He also received and distributed investor funds through his personal accounts and connected entities, including M/s Dhanyasree Enterprises and M/s Universe369 Infra Private Limited.
The ED had earlier conducted searches under Section 17 of the PMLA at nine premises connected with Naveen Kumar and his associates on June 16 and 17. Further investigation is in progress.