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ESI scam: ED attaches Rs 144 cr properties

ESI scam: ED attaches Rs 144 cr properties

The Enforcement Directorate on Tuesday attached properties worth Rs 144.40 crore under Prevention of Money Laundering Act-2002 belonging to former Insurance Medical Scheme (IMS) director Devika Rani and other officials and their family members along with medical supplies of the scam.

The scam came to light in 2019 in Hyderabad. The attached assets were in the form of both movable and immovable assets, according to a press release issued by ED.

The ED initiated money laundering investigation on the basis of eight FIRs registered by Telangana Anti-Corruption Bureau (ACB) against the officials of IMS along with private persons including suppliers of medicines to IMS for violations in tendering process, misappropriation of government funds and causing loss to the State exchequer to the tune of more than Rs. 211 crore.

The then IMS Director Devika Rani in collusion with Joint Director K Padma and other staff have blatantly violated all norms of the government orders and all prudent office procedures, and issued purchase orders to firms mostly belonging to supplier K Srihari Babu and also benami firms set up by Devika Rani and P Rajeshwar Reddy.

Medical items were purchased at grossly inflated prices. Indents of dispensaries were fabricated and stock registers were fabricated to siphon off the medicines. Padma was found to be siphoning off medicines and supplies in the name of medical camps.

Patented products were sold in a cyclical manner and ultimately purchased by IMS at four to five times their normal market rate. Devika Rani, pharmacist Nagalaxmi, and their families in order to layer and conceal the bribe money, entered into a conspiracy with PMJ Jewellers and over a period of one year, regularly channeled their bribe money and purchased costly jewellery worth around Rs.6.28 crore from proceeds of crime, the press release said.

Devika Rani, Nagalaxmi, and their families also gave large cash advances to purchase prime real estate. Cash was also deposited in their bank accounts at regular intervals and once layered; the same was used to buy immovable properties.

These proceeds of crime have been well layered by showing excess profit or cash infusion in their personal bank accounts or accounts of various shell firms. The ED has done fund trail investigation and till now identified and attached 131 immovable assets consisting of 97 plots, six villas, 18 commercial shops, six agricultural lands and four flats in and around Hyderabad, Telangana, Andhra Pradesh, Bangalore and Noida; and movable assets in the form of securities and fixed deposits; total valued at Rs.144.4 crore, acquired by these accused persons.


Tags: ESI scam