Bengaluru, July 19 (IANS) The investigation into the Shushruti Co-operative Society fraud case in Bengaluru by the Enforcement Directorate (ED) sleuths has revealed cheating of investors, diversion of funds to amass property by the main accused V. Srinivasa Murthy, his wife Dharini Devi and daughter Mokshatara.

According to an official statement issued by the ED, Bengaluru Zonal Office on Saturday, “The ED has conducted search operations on July 17 under the provisions of Prevention of Money Laundering Act (PMLA), 2002 at 15 locations across Bengaluru and Ramanagara Districts, including the office of Shushruti Souharda Sahakara Bank Niyamitha and residential premises of its chairman N Srinivasa Murthy and other accused and suspected persons.”

During the search operation, incriminating documents, details of properties acquired out of Proceeds of Crime generated out of the commission of the offence of money laundering have been collected, the ED stated.

ED initiated a money laundering investigation on the basis of various FIRs registered by Karnataka Police, wherein it was alleged that the bank neither paid interest nor returned principal amounts to its customers on their Fixed Deposits or Savings Accounts held with the bank, the ED said.

It was also alleged that the Chairman and Directors of Shushruti Souharda Sahakara Bank Niyamitha, in collusion with the employees of the bank, had siphoned off the deposits made by the customers of the bank and cheated them.

During the investigation, it was found that N. Srinivasa Murthy, his wife Dharini Devi and their daughter Mokshatara, Chairman, Director and Functional Director, respectively, of Shushruti Souharda Sahakara Bank Niyamitha, were instrumental in the diversion of funds from the bank.

ED investigation also revealed that Srinivasa Murthy floated different financial entities such as Shruti Souharda Credit Co-operative Society, Shree Lakshmi Mahila Co-Op Society (managed by Rathnamma, a close relative of Srinivasa Murthy) and others and accepted deposits from various depositors with an intention to cheat them.

It was also revealed that Srinivasa Murthy and others used to sanction loans in the names of their close associates, without following proper procedure and at times without any collateral. The loan account was later turned into NPA, and Srinivasa Murthy and others used to get properties registered in their names from the said amount, the ED said.

The investigation also revealed that Mokshatara, daughter of Srinivasa Murthy, used to take employees of Shushruti Souharda Sahakara Bank Niyamitha to the office of SROs and purchase properties in their names and simultaneously get General Power of Attorney in her name.

Further investigation is in progress, the ED stated.

It can be recalled that, earlier, in 2022, the Bengaluru Central Crime Branch (CCB) had registered a case against the Shushruti Co-operative Society. Following its investigation, the CCB had arrested several individuals.

The society was established by N. Shrinivasa Murthy, who later appointed several of his family members as directors and members. The case was filed after it was found that the society had issued loans to insiders and failed to return money to depositors.

Following the CCB case, the ED launched its own investigation. Based on the FIR filed by the CCB, the ED registered an ECIR (Enforcement Case Information Report) and initiated action.

This case pertains to the alleged cheating of over Rs 100 crore from more than 15,000 depositors, who were lured into investing with promises of high interest rates, sources added.

Subsequently, the collected funds were diverted through unsecured loans to associates. Most of these loans turned into non-performing assets (NPAs), and the money was laundered and used to purchase properties, indicating clear violations under the Prevention of Money Laundering Act (PMLA).

The proceeds of crime (POC) in this case are estimated to exceed Rs 100 crore, according to sources.

So far, more than 20 high-value properties—previously unidentified by the Karnataka Police under the Karnataka Protection of Interest of Depositors in Financial Establishments Act (KPIDE)—have been uncovered during the ED’s ongoing search operations, sources said.

–IANS

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