K’taka Excise Dept functioned like organised bribe network, says ED after statewide raids

Bengaluru, June 25 (IANS) In a significant development following statewide raids, the Enforcement Directorate (ED) on Thursday alleged that the Karnataka Excise Department functioned like an organised syndicate involving public officials, their associates and private individuals for the collection of bribes.

The Enforcement Directorate (ED) had carried out extensive searches across Karnataka in connection with an alleged systemic corruption case involving State Excise Department officials, including a close relative of Public Works Department (PWD) Minister Satish Jarkiholi.

According to an official statement issued on Thursday, the Bengaluru Zonal Office of the ED conducted searches under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, on June 24 at 14 locations across Bengaluru, Mysuru and Belagavi.

The raids were conducted based on allegations of large-scale corruption within the Excise Department and the alleged accumulation of disproportionate assets by government officials.

The key individuals covered during the searches included Excise Department officials Jagdish Nayak, K.M. Thammanna and Y.D. Manjunath. The agency also searched premises linked to their family members, business partners and close associates. Manjunath is the brother-in-law of PWD Minister Satish Jarkiholi.

The ED statement said: “The state excise department is running like an organized syndicate network of public officials, their associates and private individuals for collection of bribes; the network works like a well-oiled machine which runs on corruption money generated by various excise shops which pay a fixed monthly bribe to field officers.

“The money is also generated during renewal/shifting of licenses and also during issuing of fresh licenses. The bribe so collected is centrally pooled and distributed with the help of intermediaries and associates, who maintain an account of money received and paid in an unofficial cash book, which has been seized from one premise.

“The illegal gratification, which constitutes proceeds of crime, is further used by the individual officers for personal consumption, investment in properties and business activities.

“One unique modus operandi of money laundering detected during the investigation has revealed that most of the officers of the Excise Department have obtained liquor licences in the names of their family members and entities controlled by them and are illegally running liquor businesses.

“The income generated from these businesses is projected as having been generated from legitimate businesses, thus integrating the proceeds of crime into the regular economy.

“During the search proceedings, incriminating evidence in the form of digital devices, a bribe distribution cash book, property documents and other materials have been seized from different premises. The search operations resulted in the seizure of proceeds of crime in the form of cash amounting to approximately Rs 5.5 crore and gold jewellery valued at Rs 7.8 crore, along with foreign currency worth Rs 3.3 lakh, from the premises of Y.D. Manjunath, his driver, family members and associates.

“Therefore, the total proceeds of crime seized in this case so far amount to Rs 13.3 crore.”

During the operation, ED officials reportedly recovered and seized several incriminating materials, including digital devices, property-related documents and a cash book allegedly detailing the distribution of bribes.

The agency stated that it had seized cash amounting to approximately Rs 5.5 crore, gold jewellery valued at around Rs 7.8 crore and foreign currency worth about Rs 3.3 lakh. The total value of the assets and valuables seized during the searches is estimated at approximately Rs 13.3 crore.

The ED said the recovered documents and digital evidence were being examined as part of its ongoing investigation into the alleged money laundering activities linked to corruption in the Excise Department.

Officials indicated that further investigation was underway to trace the proceeds of crime, identify additional beneficiaries and determine the extent of the alleged corruption network.

No arrests have been announced so far, and the investigation remains in progress.

According to the statement, the raids were conducted at 14 premises across Bengaluru, Mysuru and Belagavi in Karnataka. The investigation was initiated on the basis of an FIR registered by the Karnataka Excise Department alleging the collection of illegal gratification for processing and issuing various excise licences and the subsequent use of those funds for personal enrichment.

The information contained in the FIR was further supported by verifiable complaints and documents received by the ED regarding alleged money laundering activities involving the acquisition of movable and immovable properties, benami transactions and investments in businesses through family members and associates by the accused public servants.

Further investigation is in progress.

–IANS

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