Indore: The Enforcement Directorate (ED) has intensified its crackdown on the high-profile Indore Municipal Corporation (IMC) fake bill scam by arresting three key accused in connection with an ongoing money laundering investigation. According to the agency, the arrests are part of a wider probe into allegations that crores of rupees were fraudulently withdrawn from the municipal treasury through forged bills, fabricated documents and fake work orders.
The three accused have been identified as Abhay Singh Rathore, Mohd Zakir and Rahul Badera. ED officials said they were taken into custody on June 1 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. They were subsequently produced before a Special PMLA Court in Indore, which granted the agency custody until June 5 for further interrogation and investigation.
Scale of Financial Irregularities Uncovered
The money laundering probe stems from multiple FIRs and charge sheets filed in connection with alleged financial irregularities within the Indore Municipal Corporation. Investigators claim that between 2018 and 2023, fake and fabricated bills were submitted for projects and works that were never actually executed.
According to ED findings, forged bills worth approximately ₹119.53 crore were allegedly presented before the municipal corporation. Based on these documents, fraudulent payments amounting to around ₹86.54 crore were reportedly disbursed from the IMC treasury.
The agency further stated that its investigation uncovered evidence suggesting that even before 2018, a similar modus operandi had been used to siphon off approximately ₹6.22 crore in public funds. As a result, the total amount identified as alleged financial fraud has been estimated at nearly ₹92.76 crore, which ED considers to be proceeds of crime under the provisions of the PMLA.
Roles of Officials and Contractors Detailed
Investigators have also alleged that several firms controlled by the accused submitted fabricated bills and received payments despite no actual work being carried out. According to the agency, this resulted in wrongful losses to the municipal corporation while generating unlawful gains for the individuals involved.
ED claims that Abhay Singh Rathore, who was serving as an Assistant Engineer with the municipal corporation during the relevant period, emerged as one of the principal conspirators in the case. The agency alleges that he played a crucial role in facilitating the preparation, approval and processing of fake work orders that enabled the fraudulent disbursement of public funds.
Meanwhile, contractors Mohd Zakir and Rahul Badera are accused of operating firms that allegedly benefited from the fake billing network. Investigators claim that these firms received substantial payments from the IMC treasury based on forged documents and non-existent projects.
According to ED, firms linked to the two contractors allegedly received around ₹71.78 crore from the municipal treasury. The agency further alleges that these entities actively participated in the preparation and submission of fake bills and subsequently helped distribute the proceeds among various beneficiaries associated with the alleged conspiracy.
Asset Seizures and Ongoing Financial Trail
The latest arrests are part of a broader investigation that has already witnessed significant enforcement action. Earlier, ED conducted searches under Section 17 of the PMLA and seized cash, valuables and other assets worth approximately ₹22.04 crore. In addition, immovable properties valued at around ₹34 crore were provisionally attached in July 2025 as part of the money laundering probe.
Officials said the investigation is far from over and efforts are continuing to trace the complete money trail. Financial records, bank accounts, property documents and digital evidence are being examined to identify all beneficiaries and determine how the alleged proceeds of crime were generated, transferred and invested.
The agency believes that further analysis of the seized material could lead to additional revelations regarding the alleged fraud network and uncover more assets acquired through illicit funds. For now, questioning of the three accused is underway, and investigators are focusing on identifying the remaining proceeds of crime and uncovering the full extent of the alleged scam.
