‘Lottery King’ Santiago Martin’s premises in Tamil Nadu, Kolkata, Sikkim raided by ED

The raids come as part of an ongoing investigation after revelations that Martin’s lottery business donated more than Rs 1,300 crore in electoral bonds to various political parties between 2019 and 2024. The ED’s action aligns with a decision by the Madras High Court two weeks prior, which overturned a lower court’s dismissal of charges and mandated further investigation.

The case dates back to March 2012, when the Chennai Crime Branch seized Rs 7.20 crore from the residence of Nagarajan, an associate of Martin’s. The cash, according to Nagarajan, was generated from lottery sales involving Martin and his wife, Leema Rose, across Kerala and Maharashtra. This led the Chennai Crime Branch to file a First Information Report (FIR) for money laundering against Nagarajan, Martin, and Leema Rose, triggering an ED inquiry under the Prevention of Money Laundering Act (PMLA) of 2002.

However, in 2022, the Crime Branch filed a closure report, claiming insufficient evidence to substantiate money laundering. The Alandur Judicial Magistrate accepted this report, effectively closing the case.

The ED challenged this decision in the Madras HC, which ultimately quashed the closure order and questioned the integrity of the Crime Branch’s investigation. On October 28, the court ruled that sufficient evidence existed to reopen the case, expressing suspicion over the sudden shift in the Crime Branch’s stance.

The Madras HC’s recent judgment provided a scathing critique of the lower court’s acceptance of the closure report. Justice SM Subramaniam and Justice V Sivagnanam noted that the closure was filed despite overwhelming evidence, including fabrications intended to launder illegal funds.

Central to the HC’s concerns was an alleged fraudulent transaction involving stamp papers used for a property sale agreement. The transaction, dated March 2, 2012, was said to involve Rs 7.3 crore in cash from Martin’s wife to a co-accused, G Moorthy. The stamp paper, however, was issued only on March 9, suggesting it was backdated. The discrepancy was established through treasury records, which showed that the stamp paper had been issued by the government a week after the date recorded on the agreement.

It also said that such forgery was not adequately considered by the lower court and that the attempt to present tainted money as untainted cannot be accepted as a mere procedural lapse.

Martin’s company, Future Gaming Solutions, serves as the master distributor of Sikkim’s state lottery. According to the ED, the arrangement facilitated significant profit through unauthorised sales across various states, notably Kerala. The ED argues that such activities caused financial losses to the Sikkim government exceeding Rs 900 crore, leading to the attachment of Martin’s assets worth Rs 457 crore last year.

Adding a layer of complexity to the case are Martin’s financial contributions to political entities. In 2023, reports from the Election Commission revealed that Future Gaming had purchased electoral bonds exceeding Rs 1,300 crore over the last five years. These contributions have sparked concerns over Martin’s potential influence on political processes, especially as his business operates in states where lotteries are otherwise illegal or heavily regulated.