The Enforcement Directorate (ED) has arrested Chhattisgarh-based businessman Krishna Kumar Shrivastava in connection with an alleged ₹15 crore fraud and money laundering scheme associated with the Raipur Smart City project. Investigators allege that Shrivastava exploited perceived political leverage to convince a private firm and its promoters that he could secure a lucrative sub-contract for the civic infrastructure initiative, despite no such contract existing. Following his arrest after a period of evasion, the accused was produced before a Special Prevention of Money Laundering Act (PMLA) Court in Raipur, which remanded him to ED custody for nine days, until August 7.
Purported Political Influence and Fake Sub-Contract Lure
According to ED submissions made in court, Shrivastava had been absconding for a considerable period, leading to a court-issued proclamation order against him prior to his apprehension. During custodial interrogation, the agency noted that the accused allegedly suppressed material facts regarding the movement of funds. Investigators claim that Shrivastava projected himself as a close associate of a former Chhattisgarh Chief Minister and represented himself as an Officer on Special Duty (OSD) or Personal Assistant (PA) to a senior political functionary. He leveraged this assumed authority to gain the confidence of potential investors and promise them exclusive sub-contracting rights.
The financial investigation originates from a police First Information Report (FIR) filed by Rawat Associates and its promoters. The complainants alleged that they were defrauded of ₹15 crore after being persuaded to invest in the Smart City enterprise. Subsequent inquiries by law enforcement confirmed that the sub-contract promised by the accused was entirely fabricated, supported by forged documentation and false assurances.
Money Laundering, Shell Entities, and Overseas Transfers
The agency’s probe revealed that funds received from the promoters were directed into bank accounts associated with five commercial entities. Verification of these entities disclosed that they possessed no physical presence or legitimate operations at their registered addresses. Furthermore, preliminary digital forensic findings indicate that the social messaging account used to transmit bank account credentials to the victim was registered under the name of an office peon.
To maintain the illusion of legitimacy, the accused reportedly returned approximately ₹3.40 crore to the complainants, framing the transfer as partial return on investment. The ED alleges that the remaining funds were layered through an elaborate network of shell companies to obscure the origin of the capital. The funds were subsequently transferred out of India under the guise of legitimate international trade expenditures, specifically disguised as freight charges and container leasing fees. The financial trail indicates that these funds were routed to overseas entities operating in Dubai, Hong Kong, China, and Singapore.
Broader Investigations and Legal Proceedings
The ED informed the court that the accused allegedly used identical tactics on other members of the regional business community. In a secondary instance under investigation, another businessman was similarly induced to hand over several crore rupees in cash along with undated signed bank cheques after being presented with claims of political proximity.
Investigating officers are currently auditing bank statements, corporate registration records, digital evidence, and cross-border financial channels to map the complete money trail. The agency stated that if ongoing inquiries establish the co-conspiracy or direct involvement of additional individuals or corporate entities, formal legal proceedings will be initiated against them under the relevant provisions of the PMLA and associated laws.
