Srinagar, Nov 09 (HS): The Enforcement Directorate (ED) on Monday said it had provisionally attached 11 immovable properties worth Rs 10.63 crore in Srinagar and Bandipora districts in connection with an alleged fraud involving loans sanctioned under the Prime Minister’s Employment Generation Programme (PMEGP).

In a statement, the ED said its Srinagar Zonal Office had issued a Provisional Attachment Order under the Prevention of Money Laundering Act (PMLA), 2002, covering land and buildings allegedly held by suppliers-cum-brokers, J&K Bank officials and other persons involved in the alleged misuse of the scheme.

The investigation was initiated on the basis of two FIRs registered by the Anti-Corruption Bureau (ACB) and the Central Bureau of Investigation (CBI), Srinagar, alleging that PMEGP loan funds were misappropriated through a criminal conspiracy involving borrowers, bank officials of J&K Bank's Sumbal and Gamud Gadhkhud branches, and other persons.

According to the ED, the investigation revealed that loans were fraudulently obtained by projecting dummy borrowers and using fake invoices issued in the names of non-existent firms and companies, allegedly in connivance with bank officials and private persons acting as suppliers-cum-brokers.

The agency said a survey conducted at the two bank branches under Section 16 of the PMLA revealed 270 term loan accounts and an equal number of working capital accounts linked to PMEGP loans. The non-performing assets (NPA) in these accounts amounted to Rs 32 crore.

The investigation further revealed that proceeds of crime generated through the alleged fraud were diverted through multiple bank accounts and used for the construction and renovation of properties, besides personal enrichment.

The ED said its investigation had identified Hilal Ahmad Wani and others as allegedly playing a major role in fraudulently obtaining PMEGP loans. Borrowers were allegedly induced to avail themselves of loans using KYC documents and other records, while fake invoices of non-existent firms registered in the names of suppliers-cum-brokers or their family members were used to facilitate the disbursement of funds.

The agency traced the generation of proceeds of crime to Rs 11.37 crore, which were allegedly routed through multiple bank accounts. A portion of the amount was used to construct and renovate properties held in the names of family members, while a substantial part was allegedly siphoned off.

The ED said the 11 properties, held under the control of suppliers-cum-brokers, bankers and one bank officer, had been provisionally attached under Section 5(1) of the PMLA to safeguard the value of the alleged proceeds of crime. Further investigation in the case is underway.

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Hindusthan Samachar / Zahoor Hussain Bhat