ED Raids 15 Locations in Bengaluru in Money Laundering Case Linked to Cooperative Bank Fraud

The Enforcement Directorate (ED) has carried out raids at 15 locations across Bengaluru as part of a money laundering investigation involving N. Srinivas Murthy, chairman of the Sushruti Saudhar Sahakari Bank. The action was initiated after an ECIR (Enforcement Case Information Report) was registered, based on multiple FIRs filed in various police stations against Murthy, his family members, and associates.

The Allegations

The primary allegation is that the bank, under Murthy’s leadership, stopped paying interest to customers on their fixed deposits and savings accounts. When customers raised concerns and approached the bank, they were reportedly misled with excuses like "server issues." It is alleged that Murthy, along with his wife Dharni Devi (director) and daughter Mokshatara (functional director), conspired with bank staff to siphon off customer deposits.

How the Public Was Cheated

Murthy is accused of attracting deposits by offering unusually high interest rates. People were encouraged to open fixed deposits in their names and the names of their family members. Initially, the bank paid interest regularly, but by 2021–22, the payments stopped and customers were not allowed to withdraw their FDs. Around this time, Murthy started another entity—Shruti Saudhar Credit Co-operative Society—headed by his brother-in-law B. V. Satish and nephew Deepak. Similar fraudulent practices followed.

Expansion of the Fraud Network

Murthy is also said to have created multiple other financial outfits, including Sri Lakshmi Mahila Co-operative Society, managed by his second wife. These institutions were allegedly used to continue the fraudulent collection of public deposits. He retained control over all major committees in the bank—loan, investment, audit—to ensure unmonitored access to funds. Loans were issued without guarantees to close associates, and most of them were never repaid. These funds were often withdrawn in cash or diverted to Murthy’s personal and business accounts.

Money Laundering Modus Operandi

To disguise the source of funds, Murthy reportedly transferred money through the accounts of family members and close aides. This layering technique is a textbook method of money laundering, designed to make illicit funds appear legitimate. The ED’s current raids aim to trace the flow of money and identify assets acquired using the defrauded funds.

The investigation continues as the agency gathers more evidence of financial misappropriation and efforts to conceal the origins of the illegally obtained wealth.