The ED has arrested two men in a ₹1,417.86 crore case involving alleged investment fraud affecting nearly 36,000 investors.
What did the ED allege?
The Enforcement Directorate arrested S Naveen Kumar and S Muthuselvam on September 29 under Section 19 of the Prevention of Money Laundering Act, 2002. They were produced before the Special Court for PMLA cases and remanded to 15 days of judicial custody.
The probe is based on an FIR registered by the District Crime Branch in Erode under money laundering provisions and the Tamil Nadu Protection of Interests of Depositors Act.
According to the ED, the accused and their associates floated investment schemes named “UNI”, “FNP”, “FAP” and “UNR” through Unique Exports, East Valley Agro Firms and other linked entities.
FCRF Launches CP-FRM to Build India’s Next Generation of Fraud Risk Professionals
How were investors allegedly drawn in?
Investors were allegedly promised high returns purportedly generated from profits in agricultural exports. The ED, however, said its financial analysis found virtually no substantial export business and alleged that the operation functioned as a financial trap.
Around ₹1,417.86 crore was collected from approximately 35,759 investors, according to the agency. More than ₹719 crore was deposited into accounts linked to Unique Exports, while investor funds were allegedly routed through more than 100 bank accounts belonging to associated firms, family members and close aides.
Where did the money allegedly go?
The ED described Naveen Kumar, proprietor of Unique Exports, as the alleged mastermind who personally controlled banking operations and the movement of funds.
The agency alleged that ₹390.90 crore was falsely presented as salary payments even though the firm had only four employees. Another ₹79.56 crore was allegedly recorded as purchases of onions and other agricultural commodities despite there being no physical trade.
Muthuselvam allegedly helped design the schemes and attract investors. The ED said that while he invested ₹42.10 lakh, he allegedly siphoned off ₹12.72 crore through returns, referral bonuses and commissions. Funds were allegedly routed through his personal accounts and entities including Dhanyasree Enterprises and Universe369 Infra Private Limited.
What happens next in the investigation?
The arrests followed ED searches at nine linked premises on June 16 and 17 under Section 17 of the PMLA.
The agency said its investigation into the wider network remains under way, with efforts continuing to trace assets connected to the alleged operation. The case centres on accusations that the two arrested men and their associates collected ₹1,417.86 crore from thousands of investors through purported export-linked investment schemes and moved the funds through an extensive network of bank accounts.
Follow for daily updates on cybercrime, corporate fraud, DFIR, hacking, investigations, and digital forensics
