Karnataka Cong MLA Nagendra 'mastermind' of multi-crore Valmiki scam: ED

Karnataka Congress MLA B Nagendra is the "mastermind" behind the multi-crore Valmiki Corporation alleged scam and the funds diverted from this state government entity were also used for a candidate who contested the Lok Sabha polls earlier this year, the ED claimed Wednesday.

The federal agency said it has filed a prosecution complaint or charge sheet in this case sometime ago before a special Prevention of Money Laundering Act (PMLA) court in Bengaluru. The court has taken cognisance of the charge sheet, it said.

"B Nagendra, MLA and former Minister for Scheduled Tribal Affairs, has been named as the primary accused and mastermind behind the scam, allegedly orchestrating it with the help of 24 others, including key associates like Satyanarayana Varma, Etakari Satyanarayana, J.G. Padmanabha, Nageshwar Rao, Nekkenti Nagaraj, and Vijay Kumar Gowda," the Enforcement Directorate said in a statement.

Nagendra was arrested by the ED in this case.

The agency claimed its probe found that "under the influence of B Nagendra, the account of the Corporation (Karnataka Maharshi Valmiki ST Development Corporation) was moved to the MG Road Branch without any proper authorisation, where Rs 187 crore, including Rs. 43.33 crore from the state treasury under the Ganga Kalyana Scheme, were deposited without following proper procedures and in violation of government guidelines.

"These funds were subsequently siphoned off through multiple shell accounts and converted into cash and bullion," the ED alleged.

An amount of Rs 20.19 crore of the "diverted" funds were used to support a candidate contesting the 2024 Lok Sabha election from the Bellary constituency, as well as for the personal expenses of B Nagendra, it added.

The ED said "evidence" of these expenditures was found by it during search operations conducted by it and "corroborated" by financial analysis and statements

"Details of these election expenses were retrieved from the mobile phone of Vijay Kumar Gowda, who handled the cash on Nagendra's instructions," it claimed.

The money laundering case stems from an FIR of the Karnataka Police and the CBI where it was alleged that around Rs 89.62 crore were diverted from the accounts of the Corporation's (Valmiki) accounts into "fake accounts" across Andhra Pradesh and Telangana and later laundered through shell entities.

The alleged irregularities came to fore after accounts superintendent of the Corporation, Chandrasekharan P was found dead on May 21. He wrote a suicide note alleging illegal transfer of money from the Corporation to various bank accounts.

In the suicide note, Chandrasekharan alleged that there was an unauthorised transfer of Rs 187 crore belonging to the state-run Corporation from its bank account.

Additionally, Rs 88.62 crore was illegally deposited into various accounts of some Information Technology (IT) companies and a Hyderabad-based cooperative bank.