The Enforcement Directorate has searched eight locations across Maharashtra, West Bengal, Gujarat and Delhi-NCR as part of a money-laundering probe into an alleged fake CSR funding network. The agency said it seized around ₹21 lakh in cash, documents and digital devices during searches conducted under the Prevention of Money Laundering Act. Investigators are examining the alleged routing of part of ₹200 crore in CSR funds through trusts, companies, intermediaries and suppliers, with possible links to shell companies and GST-related cases.

ED Raids Fake CSR Scam Network Across Four Regions, Seizes ₹21 Lakh

The Enforcement Directorate on Monday raided eight locations in Maharashtra, West Bengal, Gujarat and Delhi-NCR in connection with an alleged CSR funding and money-laundering network involving trusts, companies and intermediaries.

The ED raided fake CSR scam locations in four regions and seized cash, documents and digital devices as it probed an alleged corporate social responsibility funding network, the agency said.

The Enforcement Directorate’s Mumbai Zonal Office-I carried out searches under the Prevention of Money Laundering Act, 2002, against Dharmendra Kumar Chandradev Singh and others in the alleged scheme.

Officials also recovered about ₹21 lakh in cash besides documents and electronic devices during the searches. The agency claimed that a part of ₹200 crore of CSR funds was routed through the network under investigation.

PMLA probe follows Juhu police case

The probe into money laundering was initiated after a First Information Report (FIR) was lodged at Juhu Police Station, where Singh is facing allegations under various laws related to medical practice and fraudulent conduct.

The charges include some provisions of the Maharashtra Medical Practitioners Act, 1961, the National Medical Commission Act, 2019, and the Bharatiya Nyaya Sanhita, 2023.

The offences are scheduled offences under the Prevention of Money Laundering Act and are punishable under sections 420, 467, 471 and 475 of the Indian Penal Code.

Singh does not hold any recognised medical qualification as per the Enforcement Directorate and is not registered with the Medical Council; his formal education was up to Class XII, said the ED.

The agency said Singh nonetheless held himself out as a doctor for nearly 30 years, using the title when setting up charitable trusts and private companies.

They allegedly posed as organisations undertaking corporate social responsibility projects in the health sector and thereby secured large financial contributions from public-sector undertakings and private companies.

ED traces alleged CSR fund diversion

The Enforcement Directorate, citing findings of the investigation, said that there is an alleged wider network involving charitable trusts, trustees, CSR agents, intermediaries and equipment suppliers.

Sources said at least 40 public sector undertakings and banks in India had donated CSR funds to trusts run by Singh, and several of their projects remained incomplete.

Some projects reportedly did not match the amounts received by investigators, vendor invoices were allegedly padded, and extra money moved through alleged shell companies.

The agency, in its probe, found that intermediaries facilitating CSR contributions were allegedly paid commissions and kickbacks and routed the funds through interconnected entities.

The probe also looked into the purchase of expensive machinery and medical equipment for hospitals and health centres through the charitable trusts linked to Singh.

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Public recommendations and shell companies under scrutiny

The agency said healthcare facilities that lacked adequate resources for equipment were connected with local public representatives who nominated selected projects for funding from Singh’s trusts.

The investigation revealed that the CSR funds were given to the trusts by public sector undertakings on the recommendation of public representatives or persons working with them.

The Enforcement Directorate also alleges that some private companies got their CSR contributions back in cash after deducting a small commission from the amount.

Investigators found a network of CSR agents and intermediaries who were allegedly passing on contributions to the trusts before sending funds through shell companies controlled by market operators.

The agency said several companies involved in these transactions have also been linked to GST fraud cases, adding another layer to the financial investigation.

The searches are part of an ongoing investigation, and the allegations made by the Enforcement Directorate are subject to further examination through the legal process and evidence available.

Seizure of cash, documents and digital devices could assist investigators in tracking financial transactions, beneficiaries, intermediaries and movement of CSR contributions across entities.

Sprouts News said the case points to the scrutiny of corporate social responsibility funds, particularly where charitable bodies, public-sector contributions and private intermediaries overlap. 

Further proceedings will be necessary to establish the extent of the alleged financial network, the role of individual entities and whether other offences or beneficiaries emerge during the investigation.