ED files prosecution complaint in money laundering probe against Karnataka Congress MLA Veerendra Puppy

The ED prosecution complaint comes on the heels of the Karnataka High Court rejecting a plea filed by the MLA’s wife questioning the arrest of the MLA in a money laundering case in the absence of a valid predicate offence against him.

Sources said the ED had filed its prosecution complaint last week while considering the possibility of the Karnataka MLA seeking statutory bail if the ED did not file its prosecution complaint within 60 days of his arrest.

On October 15, a single-judge bench of the Karnataka High Court dismissed a plea filed by the MLA’s wife against the arrest of her husband, citing the pendency of a police closure report in the Harohallu cheating case against the MLA and materials unearthed by the ED in the course of its money laundering probe against the Congress’s Chitradurga MLA.

The counsels for Veerendra argued in the HC that out of seven FIRs cited by the ED as being the basis for the money laundering probe against the Congress MLA, as many as six were quashed or the accused had been acquitted.

The ED, however, argued in the HC that investigations had revealed a large network of individuals and companies, with Veerendra at its centre, being involved in a huge racket where large sums of money are generated by cheating people on betting apps.

The ED has alleged that the MLA was using a Mercedes-Benz car worth Rs 75 lakh that was registered to a firm of a family member of Gulshan Khattar, the director of the payment gateway service Fonepaisa, which was allegedly servicing the betting payments received by the MLA’s betting apps.

On August 22 and 23, the ED searched 31 locations linked to K C Veerendra, the Chitradurga MLA of the Congress party, and his brothers and associates. The ED also arrested K C Veerendra in Gangtok in Sikkim on August 23 while he was on a business visit.

The searches on the Congress MLAs’ gaming businesses came close on the heels of parliament passing a bill to ban online real money-based gaming activities.

The ED seized over Rs 150 crore of assets linked to the MLA since his arrest on August 23, including gold, cars and cash.

“The money collected is routed through several mule accounts, which are sourced by these betting operators from intermediaries from all across India. ED investigation has revealed a nexus of online betting apps with isolated instances of cybercrime across India, by way of mule accounts creation in the name of individuals in exchange for petty sums,” the ED said.

The estimated turnover of betting applications controlled by Veerendra is more than Rs 2,000 crore, an ED statement said recently.

Veerendra is considered a close associate of Karnataka deputy CM and businessman politician D K Shivakumar. Among the premises linked to Veerendra that the ED searched was that of Anil Gowda, the brother of Congress’s RR Nagar MLA candidate Kusuma G, who is a close associate of Shivakumar’s brother and former MP D K Suresh.

The Karnataka HC, however, recently stayed the money laundering investigations against Anil Gowda H, an advocate and alleged associate of Puppy in betting and gaming businesses.