1 of 9 payment gateways linked to Karnataka MLA K C Veerendra Puppy’s illegal betting business got ₹ 2,000 crore, ED tells court

The counsel for Puppy had opposed the extended remand, citing a September 3 press release by the agency, which detailed the findings of the probe. The counsel argued that there was no further probe left since the ED had provided the details of its findings in its press note.

The ED’s custody of Puppy is set to conclude on September 8, even as a high court plea filed by his wife, Chaitra R D, against his arrest is set to be heard. The high court is also expected to pronounce its verdict in a challenge to a summons issued to a business associate of the MLA, Anil Gowda H, an advocate with connections to Congress leaders.

The ED has, meanwhile, stated that the money collected from betting sites like King567, Raja567, Lion567 operated by Puppy and his associates “through a single gateway alone is more than ₹ 2,000 crore in a short span of time”.

“It has also been revealed that several gateways have been used for routing payments collected through these websites. It has been revealed that K C Thippeswamy, brother of the accused, is operating three business entities from Dubai viz. Diamond Softech, TRS Technologies, Prime9 Technologies and that these entities are related to the call centre services and gaming business of KC Veerendra,” the ED has stated.

“It is suspected that many more such Dubai based entities like Castle Rock Project Management Services, Lascaux Core Project Management Services etc. have been incorporated by KC Veerendra in partnership with K C Thippeswamy, Pruthvi N Raj, Anil Gowda and others,” the agency has further stated.

The ED probe has allegedly revealed the use of hundreds of mule accounts for routing the funds collected from the online betting and gaming sites operated by the MLA. The mule accounts are provided by various middlemen at the instance of several persons, including Appu alias Pruthvi N Raj, the MLA’s nephew, the ED has alleged.

A total of ₹ 14.46 crore has been found in 262 mule accounts linked to “one of the accused gateways through which money collected by multiple gaming websites operated by K C Veerendra and his associates were being routed”, the ED has stated.

“These transactions include layering the said money deposits of players through escrow accounts of gateways and TSPs and then making settlement in mule accounts which are controlled by the gaming site owners. These funds are further siphoned off in various ways, including through hawala transactions,” the ED has alleged.

The central agency has further claimed that Puppy and his associates in Dubai are operating several gaming websites by using various gateways and fintech service providers “for layering of funds and for masking their illicit activities as genuine e-commerce businesses”.

The ED has said that K C Veerendra Puppy is one of nine accused in three cases of fraud involving betting sites that have been registered in Goa, where the MLA also owns casinos, Hyderabad and Vadodara.

The ED has also alleged that the MLA received funds from illegal betting sites through three firms operated by him—ABH Infrastructure, AVSVA Enterprises and Diamond Softech.

The new FIRs to which the ED has linked Puppy “are complaints that are registered in different parts of the country by users and he is not linked in the cases”, the counsel for the Congress MLA has argued.

On August 22 and 23, the ED carried out searches at 31 locations linked to Puppy, as well as his brothers and associates. The agency subsequently arrested the MLA in Gangtok, Sikkim, where he was on a business visit.

The searches were linked to “the matter of illegal online and offline betting”, the ED said in an official statement on August 24. The searches came close on the heels of Parliament passing a bill to ban online real-money-based gaming activities.