Chandigarh/New Delhi, Mar 11 (PTI) The Enforcement Directorate registered a money laundering case and conducted searches at multiple locations on Wednesday in connection with alleged embezzlement of Rs 590 crore from the Haryana government's accounts maintained with IDFC First Bank in Chandigarh, official sources said.

The federal probe agency conducted searches at 19 premises in Chandigarh, Gurugram in Haryana and Mohali in Punjab against various business entities which helped the accused persons get accommodation (hawala) entries to conceal the money trail and proceeds of crime, they said.

The raids were undertaken after the ED booked a case under the Prevention of Money Laundering Act (PMLA) taking cognisance of a Haryana State Vigilance and Anti-Corruption Bureau (SV & ACB) FIR.

According to the IDFC First Bank, the alleged Rs 590-crore fraud was committed by its employees and others in accounts held by the Haryana government with the private sector lender.

The SV & ACB has arrested four persons in the case, of which two are ex-IDFC First Bank employees and the rest are private persons who own a partnership firm.

As per the police and ED allegations, Haryana government funds were supposed to be deposited by various departments of the state in the bank but instead of being deposited in the FDs, these were allegedly diverted by the accused for their personal purpose, the sources said.

The ED conducted searches on various business entities which have given accommodation (hawala) entries to the main accused persons, ex-bank officials, certain beneficiaries of the alleged scam and real estate agents where the proceeds of crime have been dissipated, they said.

Preliminary probe shows "huge" funds have been transferred to various shell (dummy) companies and minor jewellery entities and finally siphoned off under the guise of gold purchase and investment into real estate sector, the sources said.

They said a "significant" amount of cash withdrawals has also been noticed in the said money trail.

The ED sources said a Chandigarh-based hotelier Vikram Wadhwa, involved in construction of real estate projects in the Tricity (Chandigarh-Mohali-Panchkula), is under their scanner. He is alleged to be absconding after the news about the alleged scam came to limelight, as per the sources. PTI ABS/NES KVK KVK

Money laundering probe under PMLA registered and searches conducted after alleged diversion of government funds into shell entities and real estate. Enforcement Directorate registered a case under the Prevention of Money Laundering Act and searched multiple premises after a vigilance FIR alleging that bank employees and private associates diverted Haryana government funds, used accommodation (hawala) entries, transferred money to shell companies and small jewellery entities, and channelled proceeds into purported gold purchases and real estate, with significant cash withdrawals noted.