Kotak fraud case: Ex-employee used proceeds to buy BMWs
What's the story
A former Deputy Vice President of Kotak Mahindra Bank, Pushpinder Singh, allegedly used embezzled funds from the Municipal Corporation of Panchkula to buy luxury cars. The Enforcement Directorate (ED) has attached assets worth ₹131.13 crore in connection with this case and filed a prosecution complaint against nine people including Singh. The attached assets include bank balances worth ₹12.85 crore and properties worth ₹118.28 crore.
Fraud details
How the alleged fraud was carried out
The ED alleged that Singh conspired with Panchkula Municipal Corporation official Vikas Kaushik and bank employee Dilip Raghav to open two unauthorized accounts in the civic body's name.
The accounts were allegedly opened using forged documents and authorizations purportedly issued by the municipal corporation.
Money from genuine Kotak Mahindra Bank accounts was then transferred to these unauthorized ones through fake authorization letters, as per the ED's statement.
Money trail
Luxury cars purchased using embezzled funds
The ED claims that the embezzled funds were transferred to various individuals and entities for further layering.
Some of the money was also diverted to personal accounts of Singh, Kaushik, and their wives' accounts.
The agency alleges that Singh used these stolen funds to buy a slew of luxury vehicles including a Porsche Cayenne, BMW 740Li, and BMW X7 among others.
Concealment efforts
Singh sold luxury cars to 3rd parties
After the fraud was detected, Singh allegedly sold the luxury cars to third parties. He also sold properties in Panchkula's Sector 2 to his sister Gunita Sethi.
The ED described this as an attempt by Singh to disguise their ownership and prevent their attachment under the Prevention of Money Laundering Act.
The money laundering probe stems from an FIR lodged by the Anti-Corruption Bureau in Panchkula under provisions of the Bharatiya Nyaya Sanhita, 2023, and Prevention of Corruption Act, 1988.