New Delhi: The Enforcement Directorate (ED) has filed a Prosecution Complaint (PC) against three persons in connection with a money laundering case originating from a fund transfer scam in Karnataka Bhovi Development Corporation (KBDC), an official said on Friday.
The three accused — R. Leelavathy, B.K. Nagarajappa and P. D. Subbappa – are facing investigations over alleged misappropriation of funds from the KBDC – a Karnataka government agency set up for the development of Scheduled Castes below the poverty line.
The prosecution complaint was filed on June 3, 2025, the ED said in a statement.
The investigation, which was initiated by ED on the basis of various FIRs registered by Karnataka Police, revealed that Nagarajappa, the then General Manager of KBDC, Leelavathy, the then Managing Director of KBDC and others, in connivance with middlemen and their associates, misappropriated funds from the KBDC.
The funds were diverted to the bank accounts of various bogus entities, including Adithya Enterprises, Somanatheswara Enterprises, New Dreams Enterprises, Harntiha Creations, and Annika Enterprises, controlled/operated by Nagarajappa and others.
Search and seizure operations under the provisions of PMLA, 2002 were carried out on April 4 at various locations across Bengaluru, including the KBDC office at V V Tower, Bengaluru and residential premises of accused/suspected persons.
Nagarajappa as well as Leelavathy were arrested under PMLA, 2002 on May 5, 2025 and May 12, 2025, respectively, and they were remanded to ED custody for 14 days and 7 days, respectively. Currently, both are lodged in judicial custody.
The ED said the Proceeds of Crime (POC) were used in the purchase of properties, making payments to middlemen, and further diverted to bank accounts of individuals and various other entities.
Earlier, in this case, ED had provisionally attached various immovable properties worth Rs 26.27 crore (approx.), (having a market value of Rs 40 crore) belonging to Nagarajappa, Leelavathy and other accused involved in money laundering.
