Mangaluru: Directorate of Enforcement (ED), Mangaluru sub-zonal office, filed a prosecution complaint (PC) before the III additional district and sessions judge, Mangaluru, on Friday, seeking the conviction of five accused persons and entities, including accused kingpin Shivanand Siddappa Neelannavar and his firm Shivam Associates, found involved in a money laundering case related to a Rs 2,459 crore Ponzi scam.According to a release, the ED investigation was initiated on the basis of an FIR registered by Malamaruthi police station in Belagavi city under the provisions of the BNS, Banning of Unregulated Deposit Schemes Act, and the KPID Act.Investigation revealed that Neelannavar operated a fraudulent Ponzi network through Shivam Associates and other entities. Neelannavar was arrested on Aug 13 and is currently in judicial custody.Extensive search operations were conducted in Aug across eight premises linked to the accused and their associates in Belagavi, Chikodi, and Nipani. The search actions resulted in the recovery and seizure of various incriminating documents, handwritten audit notes and digital evidence, including mobile devices and software transaction records that confirmed the illicit generation, movement, and parking of the proceeds of crime. Furthermore, the search operation unmasked a deep-rooted financial nexus among the primary syndicate members, their family members, and multiple front entities, while conclusively enabling ED to freeze key associate bank accounts and fixed deposits containing Rs 2 crore derived directly from siphoned investor funds.The PMLA investigation unmasked an organised investment fraud orchestrated by the kingpin, along with his associates, who illegally collected Rs 2,459.5 crore from more than 35,000 gullible public investors by luring them through false representations that promised abnormally high assured returns of 3% per month alongside a 0.5% referral commission for introducing new investors, with Neelannavar prominently introducing these network referral agents as “leaders”. The vast majority of the money was rotated to pay off older investors to sustain public confidence and systematically siphoned off for personal enrichment, leaving a staggering principal amount of Rs 2,125.6 crore outstanding and completely unpaid to the public as of date.The ED investigation revealed that the proceeds of crime were layered and diverted through multiple illicit channels, where substantial investor funds were gambled in high-risk stock trading resulting in net losses of Rs 186 crore. Furthermore, approximately Rs 25 crore was routed through a complex web involving cooperative credit societies to create fixed deposits that secured loans in the names of associates for purchasing land parcels. In addition to real estate investments, funds were channelled into close family bank accounts, including those of his wife, Sangeeta, and minor son, Siddhant, as well as connected business ventures such as Shivam Sevaa (OPC) Pvt Ltd (Rs 19 crore), Shivam Lifeline Pvt Ltd and Shivam Foods. Finally, Rs 5 crore was allegedly diverted from the pooled public deposits to finance the commercial production of a Kannada feature film ‘Champion’, ED stated. An investigation is in progress.
