ED Searches 8 Locations in Four States Over Alleged Rs 200-Crore CSR Scam

The Enforcement Directorate (ED) on Wednesday conducted searches at eight locations across Maharashtra, West Bengal, Gujarat and Delhi-NCR as part of a money laundering investigation into an alleged Rs 200-crore bogus Corporate Social Responsibility (CSR) donation racket, officials said.

The premises searched belonged to market operators, trustees, equipment suppliers and middlemen allegedly linked to the network, they said.

According to the agency, charitable trusts were allegedly created and used as vehicles to obtain CSR contributions, primarily from Public Sector Undertakings (PSUs). The ED estimates that around Rs 200 crore in CSR funds were routed through the mechanism.

The money laundering case, registered under the Prevention of Money Laundering Act (PMLA), stems from an FIR filed at Juhu Police Station in July. The FIR alleged that K C Singh used the title of “Doctor” despite not possessing any recognised medical qualification or registration with a recognised medical body.

The ED investigation has allegedly found that Singh operated a network of charitable trusts in the healthcare sector through which substantial CSR funds were mobilised from PSUs and private companies.

Officials said projects were allegedly pitched to PSUs as legitimate CSR initiatives but were only partially executed or not implemented in proportion to the funds received.

Vendor bills were allegedly inflated, with the excess funds being siphoned off through shell companies. Kickbacks and commissions were also allegedly paid to middlemen and brokers who facilitated the procurement of CSR funds or arranged transactions, officials said. The agency further found that CSR contributions received from private entities were allegedly returned substantially in cash after a small commission was retained by the trusts.

The ED suspects the arrangement was used to misuse the CSR framework as a conduit for converting accounted funds into unaccounted cash, with the trusts retaining only a nominal percentage as commission. The searches are part of the agency’s ongoing investigation into the alleged financial network and its beneficiaries.