According to the Enforcement Directorate, the funds diverted from Valmiki were used during the Lok Sabha elections.

The Enforcement Directorate (ED), which is investigating the scam in the state-run Karnataka Maharshi Valmiki Scheduled Tribe Development Authority, has claimed to have found evidence that misappropriated funds were used in the recent Lok Sabha elections. The ED has arrested former minister B. Nagendra in connection with the scam.

The agency made its first statement on the case on Wednesday. Investigations revealed that around Rs 900 crore was diverted into 18 fake accounts in Andhra Pradesh and Telangana, the ED said. The diverted funds were then laundered through fake and dummy accounts and the cash and gold bars were distributed among the accused, the ED added.

About alcohol

The agency further claimed to have uncovered that “substantial amounts of funds were used to procure large quantities of liquor just prior to the general elections.”Furthermore, luxury cars, including a Lamborghini, were purchased using the proceeds of the fraud.

“During searches at the premises of Mr. Nagendra and Basanagowda Dadar (Chairman of the company), the ED found incriminating documents relating to handling of funds misappropriated during the recent elections. Further, it was found that Nagendra and his closely associated associates were involved in misappropriation of funds and cash management. These incriminating evidences relating to handling of illegal funds were also found at the residence of the Chairman of the company,” the ED further said in a statement on Wednesday.

Nagendra’s wife is interrogated

Meanwhile, ED officials questioned Nagendra’s wife Manjula for over eight hours at the ED office in Shantinagar on Wednesday about certain transactions allegedly made through her account.

The ED released her amid speculations of her arrest. Nagendra’s ED custody will end on Thursday.