India
ED Files Money‑Laundering Complaint Over ₹2,459 Crore Ponzi Scheme
The Enforcement Directorate (ED) has filed a prosecution complaint before the III Additional District and Sessions Court in Mangaluru against five individuals and entities in connection with an alleged ₹2,459.49 crore Ponzi scheme that reportedly defrauded more than 35,000 investors. The complaint, filed on October 9, seeks the conviction of the accused. Among those named is alleged mastermind Shivanand Siddappa Neelannavar and his firm, Shivam Associates. Neelannavar was arrested on August 13 and is currently in judicial custody.
According to the ED’s findings, Neelannavar and his associates raised ₹2,459.49 crore from investors by offering a guaranteed monthly return of 3% and an additional commission of 0.5% for referring new investors. The agency alleges that money collected from new investors was largely used to repay earlier investors, keeping the scheme running and maintaining investor trust, while the remaining funds were diverted for personal gains. Investors were left without repayment of their principal amount totalling ₹2,125.60 crore. The remaining money was allegedly diverted to stock markets, real estate and film production.
The investigation found that a significant share of the investors’ money was allegedly put into high‑risk stock market trading, leading to net losses of ₹185.95 crore. The ED also traced around ₹25 crore to cooperative credit institutions, including Shreemata Co‑operative Credit Society Ltd. and Dhanashree Multipurpose Co‑operative Society Ltd. The money was allegedly deposited in these institutions to create fixed deposits, which were subsequently used as collateral to obtain loans in the names of associates for purchasing land.
The agency further alleged that funds from the scheme were transferred to bank accounts belonging to Neelannavar’s wife, Sangeeta, and his minor son, Siddhant, besides being channelled into related business ventures. Among the entities identified was Shivam Sevaa (OPC) Pvt. Ltd., which allegedly received ₹19 crore. Shivam Lifeline Pvt. Ltd. and Shivam Foods were also named as businesses linked to the accused. The ED also alleged that ₹5 crore collected from public deposits was diverted towards the commercial production of the Kannada feature film Champion.
In August 2026, the ED carried out searches at eight locations associated with the accused and their associates across Belagavi, Chikkodi and Nipani. During the operation, officials seized several materials, including financial documents, handwritten audit records, mobile phones and software‑generated transaction data. The agency said these findings helped it trace the alleged flow of proceeds generated through the scheme. Further investigation pointed to suspected financial links between the accused, their relatives and multiple entities allegedly involved in routing the money. The ED subsequently froze bank balances and fixed deposits worth ₹2.02 crore held by key associates.
The money‑laundering probe stems from an FIR filed at Malamaruthi Police Station in Belagavi under provisions of the Bharatiya Nyaya Sanhita, 2023, the Banning of Unregulated Deposit Schemes Act, 2019, and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.
Frequently asked questions
What was the total amount raised in the Ponzi scheme?
₹2,459.49 crore.
How many investors were defrauded?
More than 35,000 investors.
Who was the alleged mastermind of the scheme?
Shivanand Siddappa Neelannavar.