ED Seizes Rs 2.9 Crore Assets in Hyderabad Bank Fraud Probe
The Directorate of Enforcement (ED), Hyderabad zonal office, has taken decisive action by provisionally attaching four immovable properties with a total value of approximately Rs 2.9 crore. This move comes under the stringent provisions of the Prevention of Money Laundering Act (PMLA), targeting assets linked to a significant bank fraud case allegedly orchestrated by one Subbaiah Korrapati.
Details of the Attached Properties
The attached assets, which are now under the provisional control of the ED, include a mix of agricultural land, residential plots, and a commercial property. These properties are registered in the names of associates closely connected to Subbaiah Korrapati, indicating a broader network involved in the alleged financial malfeasance.
Origins of the Investigation
The ED's probe was initiated based on a First Information Report (FIR) filed by the Central Bureau of Investigation (CBI) in 2020. According to the FIR, Subbaiah Korrapati is accused of fraudulently obtaining credit facilities amounting to Rs 10 crore from the Syndicate Bank's Chandanagar branch in Hyderabad. The fraudulent activities reportedly involved the submission of forged sub-contract agreements and non-existent work orders to secure these loans.
Chargesheet and Allegations
In 2023, the Anti-Corruption Bureau (ACB) filed a chargesheet before the XXI ACMM-cum-special JMFC for trial of CBI cases in Hyderabad. The chargesheet outlines serious allegations against Subbaiah Korrapati and his accomplices. It states that they deliberately submitted forged property documents as collateral to avail credit facilities totaling Rs 12.30 crore. Subsequently, they defaulted on repayment, thereby cheating the bank and causing a wrongful loss of Rs 12.30 crore, with a corresponding wrongful gain to themselves.
ED Investigation Findings
The ED's thorough investigation uncovered that Subbaiah Korrapati and others secured loans based on non-existent and non-converted properties that were registered at highly inflated values. More alarmingly, instead of utilizing the loan amounts for the stated business purposes, Subbaiah diverted, layered, and siphoned off the loan proceeds. This was achieved through various illicit means, including transferring funds to other co-accused associates and entities via bogus sub-contracts, fake raw material bills, round-tripping of funds, and cash withdrawals.
Further Misuse of Bank Guarantees
The investigation also revealed that Subbaiah Korrapati misused bank guarantees under the NSIC raw material assistance scheme. He allegedly submitted forged pro-forma invoices and routed the funds back to his own bank accounts, further complicating the web of financial deceit.
Utilization of Proceeds of Crime
According to the ED's findings, the proceeds of crime were used for multiple purposes. These included the repayment of other loans, securing additional projects, and covering personal and business expenditures. This pattern highlights the systematic nature of the fraud and the extensive misuse of bank funds.
The provisional attachment of these properties marks a significant step in the ongoing legal proceedings, aiming to recover the ill-gotten gains and bring the perpetrators to justice. The case underscores the ED's commitment to combating financial crimes and ensuring accountability in the banking sector.
