Bengaluru, April 6 Digital records and details of properties were seized by officials of the Directorate of Enforcement (ED), Bengaluru Zonal Office, during searches on the premises of the Karnataka Bhovi Development Corporation (KBDC) in a case related to alleged diversion of Rs 97 crore government funds, an official said on Sunday.
The alleged diversion of Rs 97 crore – allocated to the Corporation by the Karnataka government for generating jobs for the marginalised Bhovi community - was done by the creation of fake 500 beneficiary accounts, according to investigators.
The searches, held on Friday under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, were simultaneously carried out at various locations across Bengaluru, including KBDC’s office located at V V Tower and residential premises of the accused, including former officials of the Corporation.
During the searches, ED officials collected digital records and details of properties acquired out of the Proceeds of Crime (PoC) generated through money laundering.
The ED initiated an investigation into the scam based on various FIRs registered by Karnataka Police in connection with the alleged misuse/diversion of Rs 97 crore from the KBDC.
ED investigators are trying to follow the money trail to uncover the complicated web of fake beneficiaries created by the accused, including senior officials of the Corporation.
The ED transferred the investigation after Karnataka Lokayukta, while looking into a complaint, stumbled upon evidence hinting at alleged money laundering.
In December 2024, a mobile containing key information related to the accused was stolen, and KBDC’s general manager filed a complaint over the incident at Nelamangala Town police station.
The phone was snatched from the general manager while he was waiting for a bus at Kunigal Circle, the complaint said.
The Corporation has been under the scanner for fraudulent loan disbursement, illegal transfers and failure to protect key documents.
Officials of the KBDC also faced the heat for the alleged disappearance of over 200 official files that carried information on beneficiaries of the government funds.
The KBDC, established in 2016, aims to uplift the Scheduled Caste Bhovi community, particularly those below the poverty line, through various schemes focused on social and economic development.
The Bhovi community, traditionally engaged in manual labour like stone breaking, pond maintenance, and construction, faces challenges in accessing resources and opportunities.
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