Malegaon Money Laundering Probe: ED Files Third Supplementary Complaint Against ‘Challenger King’; ₹157 Crore Routed Through Shell Entities, Mule Accounts

Mumbai, October 6, 2026: The Enforcement Directorate (ED) has filed its third supplementary prosecution complaint (PC) against Mehmood Abdul Samad Bhagad alias “Challenger King” in the Malegaon money laundering case, alleging that he and his associates operated a network of shell entities and mule bank accounts through which more than Rs 157 crore was routed as part of a money-laundering operation involving proceeds allegedly linked to cyber fraud and illegal online gaming and betting activities.

The complaint was filed before the Special Court under the Prevention of Money Laundering Act (PMLA) in Mumbai on October 1. The development comes weeks after Bhagad was arrested in the United Arab Emirates (UAE) and subsequently deported to India, nearly two years after he allegedly left the country as investigators began tracing the financial network. An Interpol Red Corner Notice was issued against him in February 2025, following which Indian agencies coordinated with authorities in the UAE to secure his return.

Mule Accounts At Centre Of Probe

Bhagad’s alleged role emerged during the investigation into a network of mule and shell bank accounts opened in Malegaon using identity documents allegedly obtained from individuals on the pretext of providing them jobs or financial benefits. The case originated from an FIR registered by the Malegaon Chhawani Police Station in Nashik in November 2024, after more than Rs 100 crore was deposited into 14 newly opened accounts with the Nashik Merchant Co-operative Bank (NAMCO Bank).

The ED later identified five similar accounts with the Bank of Maharashtra, taking the number of accounts at the two banks to 19. According to the investigation, the 14 NAMCO accounts alone received credits of more than Rs 112.72 crore from around 200 firms and companies within one to two months, before the funds were transferred through online banking channels to other entities.

The ED subsequently traced the money trail to 21 sole proprietary concerns, where transactions running into hundreds of crores were recorded.

Bhagad Allegedly Directed Network

According to the ED, Bhagad was allegedly not merely a beneficiary of the funds but directed the creation and operation of the shell entities and mule accounts. Investigators have alleged that his associates established entities and opened bank accounts on his instructions, following which the accounts collectively received more than Rs 157 crore.

The agency has alleged that acting on Bhagad’s instructions, other accused persons Nagani Akram Mohammad Shafi and Vasim Valimohmad Bhesaniya established shell entities and opened bank accounts as part of the network. The funds received in these accounts were allegedly layered through accounts of other shell entities controlled by Bhagad.

Cash Withdrawals And Hawala Links

The ED has further alleged that Shafi and Bhesaniya withdrew large amounts from accounts of dummy entities and distributed the cash to angadia and hawala operators in Ahmedabad, Mumbai and Surat, allegedly acting on Bhagad’s instructions. Both were arrested by the ED in December 2024.

The ED has also alleged that Bhagad and his associates used USDT and cryptocurrency transactions as part of the alleged laundering mechanism. According to the PC, Bhagad allegedly sold USDT to persons involved in cyber fraud and illegal online gaming and betting activities, who paid the corresponding amounts in Indian currency into mule accounts controlled by the network.

Also Watch:

Searches, Cash Seizure And Attachments

The agency had earlier conducted searches at multiple premises in Surat, Malegaon, Ahmedabad and Mumbai as part of the investigation. These searches, according to the ED, led to the recovery of incriminating documents, besides the seizure of approximately Rs 15 crore in cash and freezing of around Rs 34 crore held in various bank accounts.

The ED had also issued a provisional attachment order covering movable and immovable properties valued at approximately Rs 95 lakh in the case.

To get details on exclusive and budget-friendly property deals in Mumbai & surrounding regions, do visit: https://budgetproperties.in/