New Delhi: The Enforcement Directorate (ED) on Wednesday conducted coordinated searches at premises linked to YSR Congress Party (YSRCP) leader Malla Vijaya Prasad as part of an ongoing money laundering investigation into an alleged multi-state chit fund scam estimated at around ₹1,200 crore. Simultaneous raids were carried out at five locations in Visakhapatnam and Hyderabad, including the former legislator’s residence, office and other associated premises connected with the Welfare Group of Companies. Officials said the searches are aimed at gathering documentary and digital evidence relating to the suspected diversion of investors’ funds, financial transactions and the alleged laundering of proceeds generated through the chit fund operations.
According to officials familiar with the investigation, the ED action is linked to allegations that thousands of depositors from Andhra Pradesh, Odisha, Telangana, Chhattisgarh and several other states were allegedly induced to invest in chit fund and deposit schemes operated by the Welfare Group of Companies. Investigators are examining whether the funds collected from investors were diverted through a network of companies and financial transactions in violation of anti-money laundering laws.
Sources said ED teams from Odisha and West Bengal joined officers conducting the searches in Andhra Pradesh and Telangana. Security arrangements at all search locations were strengthened with the deployment of local police personnel and Central Reserve Police Force (CRPF) personnel to facilitate the operation. Officials are believed to have seized financial records, electronic devices and other documents that could assist in tracing the movement of funds and identifying assets allegedly linked to the suspected proceeds of crime.
Malla Vijaya Prasad currently serves as the YSR Congress Party coordinator for the Visakhapatnam West Assembly constituency. He previously represented the same constituency in the Andhra Pradesh Legislative Assembly after winning the 2009 election on a Congress ticket. Before the 2019 Assembly elections, he joined the YSR Congress Party and contested from Visakhapatnam West, but was unsuccessful.
The investigation is not the first legal proceeding involving the Welfare Group of Companies or its chairman. Officials noted that multiple criminal cases had previously been registered against Vijaya Prasad in Odisha, West Bengal, Bihar and Jharkhand in connection with alleged chit fund operations. In 2021, Odisha Police arrested him in connection with a 2019 chit fund case while he was serving as the Chairman of the Andhra Pradesh Education and Welfare Development Corporation.
Investigators said Odisha Police had registered cases under various provisions of the Indian Penal Code, the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, and the Odisha Protection of Interests of Depositors (OPID) Act, 2011. Those investigations alleged that investors were induced to deposit money with promises of attractive returns before the schemes allegedly collapsed, leaving thousands of depositors without access to their investments.
Authorities estimate that the alleged fraud involved nearly ₹1,200 crore collected from investors across multiple states. Investigators are examining financial records to determine the flow of funds, identify beneficiaries and establish whether money collected from depositors was diverted through shell entities or other financial channels. The current money laundering probe is based on predicate offences already registered by state law enforcement agencies.
The case also has a history of investigation by the Central Bureau of Investigation (CBI). In 2016, the CBI registered two separate cases in connection with the alleged chit fund operations and carried out searches at premises linked to Vijaya Prasad. Evidence gathered during those investigations is understood to form part of the broader financial trail now being examined under the Prevention of Money Laundering Act (PMLA).
Officials said the present searches are part of the ED’s continuing effort to trace assets, identify the proceeds of crime and determine whether additional individuals or entities played a role in the alleged conspiracy. Investigators are expected to scrutinise banking transactions, corporate records, property documents and digital evidence recovered during the raids before deciding on further legal action. The agency has not announced any arrests in connection with Wednesday’s searches, and the investigation remains ongoing.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
