As part of its investigation into the Karuvannur Service Co-op Bank fraud case, the Directorate of Enforcement (ED) has temporarily attached assets worth Rs. 57.75 crore that belong to several people as proceeds of crime under the Prevention of Money Laundering Act (PMLA), 2002. The connected assets include 92 bank accounts with credit amounts, fixed deposits, and 117 immovable properties, including land and buildings, across Kerala, Karnataka, and Tamil Nadu. There are also 11 vehicles among the moveable goods.
On the basis of an FIR filed by the Kerala Police under Section 420 of the IPC, 1860, the ED opened an inquiry. In 2021, the Karuvannur Service Co-Operative Bank fraud resulted in the filing of over 16 First Information Reports (FIRs) by the Kerala Police (Crime Branch) in the Thrissur District.
The loans were illegally approved and disbursed to these people and their benefactors from the Karuvannur Service Co-Operative Bank Ltd in cash without any adequate collaterals as part of a systematic plot hatched and carried out by the Secretary and Committee members of the Bank in collusion with the then Bank Manager, according to an investigation by the ED.
An investigation by the ED has so far shown that fraudulent loans were repeatedly approved by the bank on the same property without the knowledge of the community. Investigations have also shown that benami loans were granted to non-members in exchange for exaggerated property appraisals in the names of other members and that the alleged beneficiaries siphoned off and cleaned up the loan proceeds.
In Thiruvananthapuram, the Registrar of Co-Operative Societies was investigating the Karuvannur Service Co-Operative Bank. In their examination, the Registrar of Cooperative Societies discovered that more than Rs 150 crores had been diverted in the aforementioned ways.
In the past, on August 10, August 22, and September 18, 2023, the ED searched 20 places, including the aforementioned bank in Irinjalakuda, Thrissur, and also carried out five surveys at affiliated other cooperative banks to find the proceeds of crime and proof of money laundering. Four people who had benefited from the loans that had been improperly sanctioned were previously detained on September 4 and September 26, 2023, in accordance with the PMLA, 2002.
They were identified as Sathish Kumar, Kiran P. P., Arvindakshan, and C.K. Jils. An investment in a resort in Thekkady, Kerala, owned by a man named Bijoy, who had also received illegal loans from a bank, had previously had properties worth Rs. 30 Crore attached by the ED. Up to this point, ED has attached properties totalling Rs. 87.75 crore. Further research is now being conducted.
