The scam involves Vijaya Bank officials and fake firms that diverted funds meant for fixed deposits
NEW DELHI/BENGALURU — In a significant development, the Enforcement Directorate (ED) has returned Rs 3.82 crore to the Karnataka State Waqf Board after recovering funds fraudulently withdrawn in a money laundering case. The scam involved bank officials colluding with fake companies to misappropriate money intended for fixed deposits (FDs) by the Waqf Board.
The case, which has drawn widespread attention, revolves around the misuse of two cheques worth Rs 4 crore issued by the Karnataka Waqf Board to Vijaya Bank for opening fixed deposits. Instead of placing the funds in FDs, the money was diverted into the accounts of two fictitious companies in collusion with bank officials and certain employees of the Waqf Board.
An official from the Enforcement Directorate, speaking on condition of anonymity, said on Tuesday, “The Karnataka Waqf Board entrusted Vijaya Bank with Rs 4 crore to invest in fixed deposits. However, the money was siphoned off to fake companies rather than being invested as agreed.”
According to investigation reports, Rs 1.10 crore of the diverted funds was transferred to Door Keys Realties Private Limited. This company then purchased a Mercedes car using that amount, exposing the misuse of public money. The rest of the sum, over Rs 2.72 crore, was funnelled to another shell company, Ajay Sharma Trading Corporation.
The probe was initiated following an FIR that implicated two Vijaya Bank officials and a First Division Assistant named Syed Siraj Ahmed, employed by the Karnataka Waqf Board. The allegations accused these individuals of conspiring to misappropriate funds in the name of fixed deposits.
A senior ED investigator said, “Tracing the financial trail was challenging, but we successfully linked the diverted funds to the fake companies and uncovered the purchase of high-value assets with the fraudulently withdrawn money.”
The Enforcement Directorate took decisive action by attaching properties valued at Rs 3.82 crore linked to the accused parties. On March 31, 2017, the ED filed charges against six accused individuals and the involved institutions in a special PMLA (Prevention of Money Laundering Act) court in Bengaluru.
The ED’s efforts have been widely appreciated, with many regarding the recovery as a victory against financial crimes involving public funds. An official from the Karnataka Waqf Board said, “We are grateful to the ED for their thorough investigation and for returning the stolen money. This sends a strong message against corruption and misuse of trust.”
Meanwhile, public interest groups have called for stricter controls and oversight of funds managed by institutions like the Waqf Board to prevent such scams in the future. “Such cases highlight the need for transparency and accountability in managing public money,” commented a spokesperson from a local anti-corruption NGO.
The case remains under judicial scrutiny, with further investigations ongoing to uncover any additional links and to bring all responsible parties to justice.
This recovery of Rs 3.82 crore marks a rare but important instance of a financial crime being reversed through effective law enforcement, restoring some faith in the systems designed to protect public assets.
