Ponzi scheme: ED to produce credit society's official in Mumbai court today

New Delhi, Jan 10 After identifying fresh assets acquired using proceeds of crime, the Enforcement Directorate (ED) is likely to produce businessman Suresh Kute, arrested for Rs 2,400-crore money laundering and cheating four lakh small investors, in a special Mumbai court on Friday.

The Directorate of Enforcement (ED), Mumbai Zonal Office, arrested Kute on January 7 under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, in connection with diverting funds of Dnyanradha Multistate Co-operative Credit Society Ltd (DMCSL).

Later, he was produced before the Special Court (PMLA), Mumbai, which granted Kute's custody to ED till Friday.

The ED initiated an investigation based on various FIRs registered from May to July 2024 by various police stations of Maharashtra under various sections of the IPC, 1860, and Maharashtra Protection of Interest of Depositors (In Financial Establishments) Act, 1999, in respect of fraud committed with the investors by Kute and others.

The central probe agency said in its complaint that DMCSL was managed and controlled by Suresh Dnyanobarao Kute, Yashvant V Kulkarni, and others.

The co-operative and credit society floated various deposit schemes and claimed to provide interest which varied from 12 to 14 per cent.

During the investigation, it was found that Suresh Kute and others lured more than four lakh gullible investors to deposit money with DMCSL by promising higher returns, it said.

The ED said no payment or only partial payments were made to the investors when the deposits matured, resulting in them being cheated.

The ED investigation revealed that the funds of DMCSL were embezzled by management of the society, wherein Suresh Kute and others hatched a criminal conspiracy to illegally and fraudulently divert funds amounting to nearly Rs 2,470 crore in the guise of loans to various companies of the Kute Group (Group of companies beneficially owned by Suresh Kute and his wife Archana Kute).

Upon the disbursement of these fraudulent loan amounts, the funds were siphoned off by them through several accounts of the entities of Kute Group or directly in the form of cash.

The funds received from society were further utilised for their own personal benefits like investment in new businesses, purchasing property and personal expenses.