The Enforcement Directorate (ED) conducted search operations at four locations in Mumbai and Delhi in connection with the Rs 4,500 crore investment fraud involving Pancard Clubs Limited (PCL). The searches were carried out as part of an ongoing money laundering probe into the fraudulent investment schemes operated by the company, which allegedly duped over 50 lakh investors across India.
Details of the Investigation
According to ED officials, various incriminating documents and digital records were seized during the searches. The documents reportedly contain evidence of overseas assets and investments linked to the family members of the late Sudhir Moravekar, the former director of Pancard Clubs Limited. Authorities suspect that these assets were generating rental income, further deepening the financial irregularities associated with the scam.
The investigation stems from a case registered by the Economic Offences Wing (EOW) of the Mumbai Police under several sections of the Indian Penal Code (IPC) and the Maharashtra Protection of Interest of Depositors (in Financial Establishments) Act. The case, which has been under scrutiny since 2017, highlights the widespread financial fraud allegedly orchestrated by Pancard Clubs and its associates.
How the Fraud Operated
Pancard Clubs Limited had launched multiple investment schemes under the guise of holiday memberships, hotel stays, and insurance-linked packages. However, investors failed to receive the promised benefits, leading to complaints being filed with the Securities and Exchange Board of India (SEBI). Upon investigation, SEBI found that Pancard Clubs was running a Collective Investment Scheme (CIS) without regulatory approval, making the operation illegal.
Further investigations revealed that the schemes promised high returns and additional perks while completely disregarding SEBI and Reserve Bank of India (RBI) guidelines.
What ED Found in the Raids
During the search operations, officials discovered evidence suggesting that co-accused individuals and family members of the former director attempted to dispose of assets linked to the proceeds of crime. Additionally, digital records containing details of financial transactions and communications related to the fraud were seized.
The ED is now analyzing the confiscated materials to trace the movement of illicit funds and identify further beneficiaries involved in the scam.
Legal Action and Next Steps
Authorities believe that the fraudulent investment schemes orchestrated by Pancard Clubs resulted in significant financial losses for investors. Given the scale of the fraud, legal proceedings are expected to intensify in the coming months. The ED will continue to probe the movement of funds and take action against individuals and entities involved in the scam.