Mumbai, October 5 (Daily Kiran) : The Enforcement Directorate (ED) has uncovered a significant corporate social responsibility (CSR) fraud, seizing ₹21 lakh and digital evidence during searches across Maharashtra, West Bengal, Gujarat, and Delhi-NCR. This operation, conducted on October 1, targeted a network involved in laundering money through fake CSR donations, as reported by officials on Monday.
The investigation revealed a complex web of charitable trusts, trustees, CSR agents, intermediaries, and equipment suppliers engaged in diverting and recycling CSR funds. The ED’s actions were initiated under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, focusing on the case against Dharmendra Kumar Chandravir Singh and others linked to the fraudulent CSR donation scheme.
During the searches, officials confiscated ₹21 lakh in cash, along with various incriminating documents and digital devices. The inquiry was based on an FIR filed at the Juhu police station against Singh, who faces allegations under multiple acts, including the Maharashtra Medical Practitioners Act, 1961, and the National Medical Commission Act, 2019. Charges include serious offenses under the Indian Penal Code, such as fraud and forgery.
The investigation revealed that Singh lacked any recognized medical degree or registration with the medical council and had only completed schooling up to the 12th grade. Despite this, he misrepresented himself as a doctor for nearly three decades.
Using this false identity, Singh established and operated a network of charitable trusts that appeared to focus on healthcare-related CSR activities. However, these entities were used to gather substantial CSR funds from public sector undertakings (PSUs) and private companies.
The ED noted that at least 40 PSUs and public sector banks contributed CSR donations to trusts managed by Singh. Many projects were either left incomplete or not executed in proportion to the funds received, with inflated vendor bills. The agency alleges that intermediaries received kickbacks and commissions for facilitating these donations.
The investigation revealed that these trusts were utilized to raise funds for purchasing expensive medical machinery and equipment for hospitals and healthcare institutions. When these institutions cited funding shortages for essential equipment, they were connected to local representatives, who recommended funding through Singh’s trusts for various projects.
The inquiry also uncovered that a significant portion of CSR contributions from private companies was returned in cash to the donors after deducting a small commission. The investigation identified a network of CSR agents and intermediaries who funneled funds to the trusts, which were then redirected through shell companies controlled by market operators. Many of these companies have been linked to GST fraud investigations.
The ED concluded that the CSR system was exploited to convert accounted funds into unaccounted cash, with an estimated ₹200 crore in CSR funds misappropriated through this scheme.
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