Pen Money Laundering Case: ED Restitutes Assets Worth 289.54 Crore

The Enforcement Directorate (ED), Mumbai, has restituted immovable properties worth Rs289.54 crore to the competent authority under the Maharashtra Protection of Interest of Depositors (MPID) Act, appointed by the Government of Maharashtra, in the case of M/s Pen Co-operative Urban Bank Ltd.

The assets were provisionally attached by the ED under Section 5 of the Prevention of Money Laundering Act (PMLA), 2002, as the erstwhile office-bearers had cheated the bank and siphoned off funds for private investments. The investigation was initiated based on an FIR registered by Pen police station, Raigad. According to the chargesheet filed by the Law Enforcement Agency (LEA), the office-bearers of the bank entered into a criminal conspiracy with the bank’s auditors, willfully manipulating the books of accounts, fraudulently reporting profits and causing a loss of Rs651.35 crore to the bank.

According to the ED chargesheet, the criminals used forged documents and diverted proceeds of their illegal activities through fraudulent cash credit accounts at the bank. Part of these proceeds of crime (POC) were used to purchase immovable benami properties in Raigad. These properties, valued at Rs25.20 crore, were attached by the ED on May 26, 2014 and December 3, 2014.

Meanwhile, a depositor from Pen Co-operative Urban Bank Ltd filed a criminal writ petition before the Bombay High Court, seeking the release of the attached properties. In its ruling dated 07.10.2016, the HC directed the ED to hand over the properties to the MPID. The ED challenged the order before the Supreme Court, which, on November 3, 2017, stayed the Bombay High Court’s order.