In a major crackdown on an alleged multi-layered real estate fraud, the central investigation agency on Tuesday carried out simultaneous searches at 77 locations across eight states. The action comes amid serious allegations of collusion between builders and financial institutions, leading to the diversion and misuse of funds collected from homebuyers. Following directions from the Supreme Court, 22 fresh cases have now been registered, significantly accelerating the probe.
According to sources, the raids were conducted in key urban centres including Delhi-NCR, Bengaluru, Chennai and Puducherry. Several prominent builders and their projects have come under the scanner, with allegations that they, in connivance with banks, manipulated the usage of funds meant for housing projects. During the searches, investigators seized crucial documents and digital devices, which are expected to provide vital leads into financial transactions and fund flows.
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Homebuyers’ Funds Diverted to Other Projects
The case stems from thousands of complaints filed by homebuyers who alleged that despite paying EMIs for years, they neither received possession of their homes nor clarity on the status of their investments. In several instances, projects were left incomplete, while funds collected from buyers were allegedly diverted to other ventures or accounts. The alleged fraud has not only caused significant financial losses to investors but has also dented trust in the real estate sector.
The Supreme Court had taken serious note of the matter on April 29, 2025, directing the agency to register FIRs and initiate a thorough investigation against errant builders, particularly in the NCR region. In the first phase, 28 cases were registered. Subsequently, in September 2025, the court ordered the filing of 22 additional cases, specifically focusing on the suspected nexus between builders and banks.
Banks Sanctioned Loans Directly to Builders
So far, nearly 50 cases have been taken up for investigation, indicating that the issue is not isolated but part of a broader pattern of financial irregularities. Preliminary findings suggest that in some cases, banks sanctioned home loans directly to builders, but the funds were not utilized for construction purposes. Instead, there are indications that the money may have been diverted to other projects or even personal accounts.
Projects under investigation are spread across cities such as Delhi-NCR, Mohali, Mumbai, Kolkata, Bengaluru and Prayagraj. The agency is now working to identify the extent of the alleged collusion and to fix accountability at various levels. Investigators are also examining how regulatory norms may have been bypassed to facilitate large-scale diversion of funds.
RERA Legacy Cases Challenge Homebuyers
Experts believe that such cases have significantly eroded confidence in the real estate market. This is one of the reasons why regulatory frameworks like the Real Estate Regulatory Authority (RERA) were introduced to ensure transparency and protect buyers’ interests. However, legacy cases continue to pose challenges and require detailed investigation.
Officials involved in the probe suggest that the ongoing action is likely to uncover deeper layers of the alleged scam. The analysis of seized documents and digital evidence is underway, and further revelations are expected in the coming weeks.
For thousands of affected families, the crackdown offers a ray of hope after years of uncertainty and financial distress. The next phase of the investigation is expected to bring greater clarity on the scale of the alleged fraud and the network behind it, potentially paving the way for accountability and relief for homebuyers.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
