ED arrests former MD of Bhovi Development Corporation

The Directorate of Enforcement (ED), on Saturday, arrested R. Leelavathy, former Managing Director of Karnataka Bhovi Development Corporation (KBDC), under the provisions of the Prevention of Money Laundering Act, 2002.

According to an official release, during the investigation, it was found that Leelavathy was involved in money laundering by creating fake accounts to transfer the funds for personal gain. She was produced before the Special Court for Economic Offences and granted ED custody for seven days.

Earlier, the ED conducted search operations at various locations across Bengaluru, including the office of Karnataka Bhovi Development Corporation (KBDC) located at V.V. Tower, Bengaluru, and the residential premises of the accused. The ED claimed that it recovered several incriminating documents, digital records, and details of properties acquired out of Proceeds of Crime (POC) generated out of the commission of the offence of money laundering during these raids.

ED claimed that during the investigation, it was found that Leelavathy was instrumental in the diversion of funds from KBDC by creating bank accounts fraudulently in the names of fake entities in connivance with other suspects and accused, including B.K. Nagarajappa (the then General Manager of KBDC), Subbappa (the then superintendent of KBDC) and others.

“They managed to divert funds from the accounts of KBDC to the accounts of fake entities and fake beneficiaries, which were further transferred to friends and family members of the accused. Several bank accounts were opened, and many beneficiaries and intended beneficiaries were cheated by adopting a very well-designed and foolproof modus operandi by B.K. Nagarajappa, Leelavathi, Subbappa, and others, the investigation revealed,” ED said.

Earlier, B.K. Nagarajappa was arrested and is presently in ED custody.

“Based on the evidence gathered during the course of investigation, it was confirmed that Leelavathy was also involved in money laundering and has generated and layered the same using bank accounts of sister Late Mangala Ramu and integrated the funds in the bank accounts of her friends and family members through bogus entities created for this purpose,” ED said.