Economic Fraud
Rs 3,300 Crore Housing Fraud Rocks Bengaluru as Builder and Banks Face FIR
Bengaluru police have filed an FIR against Ozone Urbana Infra Developers and several financiers for allegedly defrauding homebuyers of Rs 3,300 crore. The funds were misappropriated through incomplete projects and fraudulent loans.
The Central Crime Branch (CCB) of Bengaluru police has registered a case against Ozone Urbana Infra Developers Private Limited, along with several banks and financial institutions, for allegedly defrauding homebuyers of Rs 3,300 crore. The complaint, filed by Errol John Noronha, president of the Ozone Urbana Buyers Welfare Association, accuses the developers of acquiring loans in buyers’ names, misappropriating funds, and failing to complete promised housing projects.
The FIR states that Ozone Urbana Developers secured Rs 1,500 crore through mortgage loans and diverted another Rs 1,800 crore from buyers’ payments and other transactions. The funds were meant to complete the Ozone Urbana township project, launched in 2012 in Devanahalli, but the project remains only 49% complete, well past its promised deadline of 2017.
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Buyers allege that the developers lured them with aggressive marketing campaigns, offering assurances that the developers would cover EMIs until the project’s completion. Despite these promises, the funds were allegedly funneled to other entities, leaving buyers and financiers in distress.
The accused include several major financial institutions such as Housing Development Finance Corporation (HDFC), Indiabulls Housing Finance, Bank of Baroda, and Piramal Capital and Housing Finance. Charges have been filed under multiple sections of the Indian Penal Code, including 406 (criminal breach of trust), 409 (breach of trust by a banker or agent), 420 (cheating), and 120B (criminal conspiracy). The Karnataka Protection of Interest of Depositors in Financial Establishments Act has also been invoked.
Despite directives from the Karnataka Real Estate Regulatory Authority (K-RERA) to deposit 70% of the funds into an escrow account, the developers allegedly failed to comply. This non-compliance, coupled with repeated neglect of buyer grievances, exacerbated the financial losses faced by stakeholders.
The suspects include Ozone Urbana Managing Director Vasudevan Satyamoorthy, his wife Priya Vasudevan, and other key executives such as Satyamoorthy Sai Prasad and Durbhakula Vamsi Sai. Investigators are now working to trace the misappropriated funds and hold the accused accountable.
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