The Enforcement Directorate on Wednesday conducted searches against Congress Bellary MP E Tukaram and three MLAs of the party as part of a money laundering investigation into the alleged Valmiki scam-linked money laundering case, official sources said.
They said five premises in Bellary and three in Bengaluru city are being searched under the provisions of the Prevention of Money Laundering Act (PMLA).
These include houses belonging to Tukaram and MLAs Nara Bharath Reddy (Bellary city), J N Ganesh (Kampli) and N T Srinivas (Kudligi).
The sources said the searches are being conducted in order to gather evidence on the allegation that funds siphoned off from the accounts of the Karnataka Maharshi Valmiki ST Development Corporation (KMVSTDC) were used for election expenses -- to distribute cash to voters and Congress workers of the Bellary seat during the 2024 Lok Sabha elections.
The money laundering case of 2024 stems from FIRs registered by Karnataka Police and Central Bureau of Investigation (CBI) which alleged that funds worth crores of rupees were diverted from the KMVSTDC and sent to "fake accounts" before being laundered through shell entities.
The corporation was established in 2006 with a primary focus on the socio-economic development of the Scheduled Tribe (ST) communities in Karnataka by running welfare schemes for them.
The alleged irregularities came to the fore after accounts superintendent of the Valmiki Corporation, Chandrasekharan P, was found dead on May 21 last year. He wrote a suicide note alleging illegal transfer of money from the corporation to various bank accounts.
Former Karnataka tribal affairs minister B Nagendra and five others allegedly linked to him were arrested by the ED in this case. Nagendra later got bail.
Nagendra told the ED that J G Padmanabha, the managing director of the corporation under his ministry, "fraudulently" transferred funds of the corporation without his knowledge or approval from the board. He denied any wrongdoing and said that he did not benefit personally from the siphoned funds.
Padmanabha told the ED that he was acting on the orders of the higher officials, including Nagendra, and he had no real control over the fraudulent activities.
Nagendra, an MLA from Bellary rural seat, resigned as minister in the face of these allegations.
According to an ED chargesheet filed last year, two of Nagendra's personal assistants and an associate "admitted" to handling large sums of money, which aligns with the broader scheme of siphoning funds for electoral purposes.
Nagendra, the agency said, handled a "substantial portion" of the proceeds of crime, primarily in the form of cash, which was used to support activities related to the Lok Sabha elections.
"This cash, siphoned from the Valmiki Corporation, was received and distributed by Vijay Kumar Gowda, personal assistant to B Nagendra, under his direct instructions," the ED said.
Gowda recorded in his statement with the ED that he had handed over cash to the persons instructed by Nagendra which "eventually went to party workers and voters, following instructions from B Nagendra, for the purpose of election-related activities", the agency said.
"To incentivise voters to cast their vote in favour of Sh. E Tukaram, the INC (Congress) candidate, Rs 200 was distributed to each voter.
"Additionally, Rs 10,000 was allocated to each polling booth to compensate the Congress party workers responsible for assisting voters and overseeing the booths," the ED said in its chargesheet filed last year.
The ED claimed that the three MLAs "ensured" that the cash was disbursed to voters and party workers in their respective constituencies and this was " corroborated" by the evidence gathered during the investigation.
It said that a total of 7,40,112 voters in Bellary were given Rs 200 each from the Valmiki funds, totalling more than Rs 14 crore, apart from Rs 10,000 each to party workers in each booth, totalling over Rs 72 lakh.
The probe, the ED earlier said, uncovered a "complex" money laundering operation within the corporation with more than Rs 187.33 crore intended for welfare schemes being fraudulently siphoned off from the corporation's account between March and May last year.
