INVC NEWS New Delhi — A massive money laundering investigation into one of Maharashtra’s largest real estate scams has resulted in the seizure of over ₹32 crore in cash, diamond-studded jewelry, and bullion. The Enforcement Directorate (ED), Mumbai Zonal Office, conducted search operations at 13 locations across Mumbai and Hyderabad on May 14 and 15, 2025, under the Prevention of Money Laundering Act (PMLA), 2002. This crackdown has brought to light a widespread network of illegal construction, fake approvals, and alleged collusion between builders and civic officials within the Vasai Virar Municipal Corporation (VVMC).
Illegal Constructions on Reserved Land Since 2009
The ED’s investigation stems from multiple FIRs filed by the Mira Bhayandar Police Commissionerate, alleging unauthorized construction of residential and commercial buildings on government and private land. The illegal activity dates back to 2009, involving 41 buildings erected on land designated for essential civic infrastructure like Sewage Treatment Plants and Dumping Grounds, as per Vasai Virar’s official development plan.
Despite having prior knowledge that these buildings were unauthorized and subject to eventual demolition, developers fraudulently sold flats to unsuspecting buyers, using fabricated approvals and documents to mislead the public. This elaborate scam has resulted in thousands of residents losing both their homes and life savings.
Bombay High Court and Supreme Court Order Demolition
On July 8, 2024, the Bombay High Court ordered the demolition of all 41 illegal structures. A Special Leave Petition (SLP) filed by affected families in the Supreme Court of India was later dismissed, paving the way for the complete demolition, which was executed by VVMC on February 20, 2025.
Key Accused and VVMC Official Implicated
The ED has identified Sitaram Gupta, Arun Gupta, and others as the key perpetrators behind this multi-crore scam. Investigators have also uncovered direct involvement of VVMC officials, who allegedly facilitated illegal construction activities in exchange for massive bribes.
During a raid at the premises of Y.S. Reddy, Deputy Director of Town Planning at VVMC, officials seized ₹8.6 crore in cash and diamond-studded jewelry and bullion worth ₹23.25 crore. Several incriminating documents were also recovered, which provide detailed insight into how the fraudulent constructions were approved and carried out under official cover.
Widespread Deception and Public Loss
Developers involved in the scam are accused of not only violating urban development laws but also defrauding thousands of homebuyers. Many buyers, unaware of the illegality, invested in flats believing them to be legitimate properties. The scam reflects a deep-rooted nexus between private builders and corrupt civic officials, allowing illegal activity to flourish for over a decade.
ED’s Crackdown Highlights Growing Focus on Real Estate Fraud
This high-profile operation highlights the ED’s increasing efforts to clamp down on money laundering in the real estate sector, particularly involving illegal constructions in urban zones. The financial probe agency continues to analyze documents and financial trails that could expose further links between developers, political figures, and municipal officials.
Further Investigation Underway
The ED has confirmed that investigations are still ongoing, with more searches and summons expected in the coming weeks. The focus now shifts toward identifying beneficiaries, money laundering routes, and potential overseas investments linked to this scam.
India’s law enforcement agencies are stepping up vigilance across urban centers to tackle the rising trend of unauthorized construction, corruption in planning departments, and illegal financial gains made by exploiting public trust and violating land use regulations.
