The Enforcement Directorate (ED) has arrested the director and promoter of a Mumbai-based firm in connection with its money laundering probe in a bank loan fraud case involving over Rs 2,600 crore. This case is said to be one of the biggest instances of bank loan default being probed by investigative agencies in the country. Agency officials said it arrested Vijay M Choudhary late yesterday in Mumbai under the provisions of the Prevention of Money Laundering Act (PMLA). Choudhary is the “director and main controller” of Ms Zoom Developers Private Limited (ZDPL) and was wanted by the ED in this case, where it is alleged that the firm and its controllers cheated 25 banks to the tune of Rs 2,650 crore. Choudhary is expected to be produced by ED officials in a court in Indore today.
The ED had booked a criminal case under PMLA based on a CBI FIR to probe this alleged default. It had also attached 1,280 acres of land in California in the United States of America (USA) in this case in July, 2015.
“The money laundering investigation was conducted in this case on the basis of FIR and charge sheets filed by the CBI where it is alleged that Choudhary controlled Ms Zoom Developers has caused wrongful loss to five banks, Punjab National Bank, Syndicate Bank, Canara Bank, United Bank of India and Union Bank to the tune of Rs 966 crore,” the ED said in a statement. Further, it said, “this loss is not just limited to Rs 966 crore but the accused has cheated more than 25 banks and it involves huge public money over Rs 2,650 crore.” The agency said its probe found that majority of the contracts shown by the firms of Choudhary were “paper contracts only” and no work was done and ZDPL has frequently sought extension of bank guarantees, counter guarantees, by submitting false grounds for extension.
It said Choudhary, along with his associate Sharad Kabra “cheated Indian bankers, siphoned off public funds outside the country and acquired assets by way of laundering the illegally generated money through web of companies created in India.” Kabra was also arrested by the ED in this case earlier. Choudhary, who is alleged to have floated 485 companies in his or his associates names, has been called the “mastermind” of this fraud case by the ED.
It added Choudhary had floated fifteen companies in the USA, three in the UK and Switzerland each, seven in Singapore, four in Germany, nine in the UAE and two each in China and Zimbabwe. He is also alleged by the ED to have formed two trusts in Liechtenstein. “It appears that he (Choudhary) has formed these companies for the sole purpose of laundering the proceeds of crime,” he said. The ED has attached assets worth Rs 130 crore in this
case till now. The firm operates from Indore and Mumbai.