The Enforcement Directorate filed a complaint on October 9 regarding a ₹2,459 crore Ponzi scheme. The agency said mastermind Shivanand Siddappa Neelannavar, arrested on August 13, duped 35,000 investors. Funds were routed through family accounts and firms. Many investors lost money as the accused used new deposits to pay old ones.
The Enforcement Directorate has filed a prosecution complaint against five individuals and entities over an alleged ₹2,459 crore Ponzi scheme that reportedly defrauded more than 35,000 investors. Alleged mastermind Shivanand Siddappa Neelannavar, arrested on August 13, remains in judicial custody.
A prosecution complaint has been filed by the Enforcement Directorate (ED) before the III Additional District and Sessions Court in Mangaluru against five individuals and entities in connection with an alleged ₹2,459 crore Ponzi scheme that reportedly defrauded more than 35,000 investors, according to The Hindu report.
Among those named in the money-laundering case is alleged mastermind Shivanand Siddappa Neelannavar and his firm, Shivam Associates. The complaint, filed on October 9, seeks the conviction of the accused. Neelannavar was arrested on August 13 this year, and is currently in judicial custody.
According to the ED's findings, Neelannavar and his associates allegedly raised ₹2,459.49 crore from investors by offering a guaranteed monthly return of 3%, along with an additional commission of 0.5% for referring new investors. Neelannavar is said to have described the network's agents as "leaders".
The agency alleged that money collected from new investors was largely used to repay those who had invested earlier, helping keep the scheme running and maintain investors' trust. The remaining funds were allegedly diverted for personal gains.
The ED estimated that investors were left without repayment of their principal amount totalling ₹2,125.60 crore. Money reportedly diverted to stock markets, real estate and film production.
The investigation found that a significant share of the investors' money was allegedly put into high-risk stock market trading, leading to net losses of ₹185.95 crore.
The ED also traced around ₹25 crore to cooperative credit institutions, including Shreemata Co-operative Credit Society Ltd. and Dhanashree Multipurpose Co-operative Society Ltd. The money was allegedly deposited in these institutions to create fixed deposits, which were subsequently used as collateral to obtain loans in the names of associates for purchasing land.
The agency further alleged that funds from the scheme were transferred to bank accounts belonging to Neelannavar's wife, Sangeeta, and his minor son, Siddhant, besides being channelled into related business ventures.
Among the entities identified was Shivam Sevaa (OPC) Pvt. Ltd., which allegedly received ₹19 crore. Shivam Lifeline Pvt. Ltd. and Shivam Foods were also named as businesses linked to the accused, the report noted.
The ED also alleged that ₹5 crore collected from public deposits was diverted towards the commercial production of the Kannada feature film Champion.
Further investigation pointed to suspected financial links between the accused, their relatives and multiple entities allegedly involved in routing the money. The ED subsequently froze bank balances and fixed deposits worth ₹2.02 crore held by key associates.
The money-laundering probe stems from an FIR filed at Malamaruthi Police Station in Belagavi under provisions of the Bharatiya Nyaya Sanhita, 2023, the Banning of Unregulated Deposit Schemes Act, 2019, and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.