ED Intensifies Probe into Kerala Credit Syndicate Fraud, Freezes Assets Worth Rs 44.5 Crore
The Enforcement Directorate (ED) has escalated its investigation into a major financial fraud case involving the Nedumparambil Credit Syndicate (NCS) and associated groups, with the agency questioning two key individuals on Tuesday at its Kochi office. This development follows extensive search operations and the freezing of assets valued at Rs 44.5 crore under the Prevention of Money Laundering Act (PMLA).
Key Individuals Questioned in Kochi
On Tuesday, the ED summoned and interrogated N M Raju, the owner of NCS, and R Pradeep Kumar, the president of Nemom Service Cooperative Bank (NSCB). Their appearance marks a critical phase in the probe, which centers on allegations of cheating and misappropriation of investor funds. The questioning aimed to uncover details about the operations and financial dealings of the syndicate, which is accused of mobilizing public deposits with promises of high returns.
Search Operations and Asset Freeze
Earlier, on February 5, the ED conducted coordinated search operations at 10 premises across Kerala and Tamil Nadu. During these raids, authorities recovered and seized a substantial amount of evidence, including:
- Incriminating documents detailing financial transactions
- Digital devices containing crucial data
- Financial records linking to the syndicate's activities
In a statement, the ED revealed that the investigation identified evidence of immovable properties acquired by the group, suspected to be derived from Proceeds of Crime. To prevent any concealment or dissipation of these assets, the agency invoked Section 17(1-A) of the PMLA, freezing properties belonging to the principal accused and their associates, totaling Rs 44.5 crore.
Investigation Details and Findings
The ED's probe is based on multiple First Information Reports (FIRs) filed by state police across various stations. A preliminary enquiry has uncovered a systematic scheme where public deposits were collected under the guise of high returns, only to be diverted through complex financial maneuvers. Key findings include:
- Diversion of funds through intra-group transfers
- Layering of proceeds to obscure their origin
- Utilization of illicit funds for acquiring movable and immovable assets
- Transactions with outside entities to facilitate money laundering
This pattern of financial activities highlights the sophisticated nature of the fraud, with the ED emphasizing that the frozen assets represent high-value acquisitions linked to criminal proceeds.
The investigation remains ongoing, with the ED continuing to analyze the seized materials and gather further evidence. The agency's actions underscore its commitment to tackling financial crimes and protecting investor interests in the region.
