ED raids 14 sites in Haryana bank fraud case

The Directorate of Enforcement (ED)’s Chandigarh Zonal Office-II on Friday searched 14 locations in Chandigarh, Mohali, and Panchkula under the Prevention of Money Laundering Act, 2002. This was part of an ongoing investigation into the alleged embezzlement of about Rs 645 crore in public funds from the Government of Haryana, the Chandigarh Municipal Corporation, and other Government accounts.

The investigation started after Haryana Police filed an FIR in February 2026. The complaint was about unexplained differences in the bank balances of the Development and Panchayat Department of Haryana at IDFC First Bank and AU Small Finance Bank. Investigators later found that large amounts had been taken from these and other official accounts and moved through intermediaries to hide the money’s source.

The searches targeted jewellers and related businesses that were identified as recipients of the diverted funds. Locations included Malik Jewellers, companies in the KLG Group (KLG Jewels, KLG Infra, and KLG & Co.), MB Gold Traders, Sham Jewellers, and Sunder Jewellers. Officers also searched places linked to Gourav Kansal, who is accused of acting as a middleman in moving and disguising the stolen money. The agency said that the embezzled public funds were put into these jewellers’ bank accounts and recorded as regular business transactions, making illegal money look like legitimate business income.

Investigators say that shell companies, reportedly set up by Ribhav Rishi, who is called the mastermind, sent specific amounts to the jewellers: Malik Jewellers received about Rs 58 crore, the KLG Group about Rs 26 crore, MB Gold Traders about Rs 5 crore, Sham Jewellers about Rs 3.66 crore, and Sunder Jewellers about Rs 3.15 crore. The Enforcement Directorate claims these jewellers laundered money taken from various Haryana Government departments and the Chandigarh Union Territory administration, and that some of the funds eventually went to accused IAS officers and other Government employees involved in the bank fraud.

In a separate criminal investigation, the Central Bureau of Investigation has filed a third chargesheet with the Special Court in Panchkula. This chargesheet names six Haryana-cadre IAS officers and other public servants in connection with the bank fraud case.

During the searches on October 2, officers found and seized Rs 4.30 crore in cash and froze about Rs 72 crore in bank accounts belonging to the jewellers and related businesses. They also took incriminating documents and digital evidence. Earlier in this case, the Enforcement Directorate arrested four people for alleged money laundering and seized or froze assets worth about Rs 211 crore. The agency has also filed a prosecution complaint against 14 accused people in the Special Court (PMLA) at Panchkula.

The ED said the investigation is still ongoing. The case involves the alleged large-scale diversion of departmental and municipal funds through two private banks, followed by efforts to hide the money using jewellery businesses and shell companies. Authorities are investigating both private intermediaries and current or former public servants in related cases.