Belagavi: The Enforcement Directorate’s (ED) Mangaluru sub-zonal office has arrested Shivanand Siddappa Neelannavar, head of Belagavi-based Shivam Associates, in connection with an alleged multi-state Ponzi scheme involving more than Rs 2,110 crore.In a press release, the ED identified Neelannavar as the key person responsible for managing the flow of funds within Shivam Associates. He was arrested on Aug 13 under Section 19 of the Prevention of Money Laundering Act (PMLA), 2002. A special PMLA court in Mangaluru remanded him to ED custody for 12 days, till Aug 24.The money-laundering investigation stems from an FIR registered at Malamaruti police station in Belagavi under the Banning of Unregulated Deposit Schemes Act, 2019, and the Karnataka Protection of Interest of Depositors in Financial Establishments Act, 2004.According to the ED, Shivam Associates mobilised Rs 2,110.9 crore from investors by promising assured monthly returns of 3%. The alleged scheme operated across Karnataka, Maharashtra, Goa and Chhattisgarh.The agency said the firm used a digital mapping system and a referral network to attract investors. Independent advisers were allegedly offered a 0.5% commission for bringing in fresh deposits.The ED further alleged that Shivam Associates had suffered mounting stock market losses since 2019. To conceal these losses and sustain investor confidence, funds collected from new investors were allegedly used to pay returns to existing depositors.Investigators claim the money was layered and routed through personal bank accounts, relatives and linked entities, including Shivam Sevaa (OPC) Pvt Ltd and Shivam Productions.Part of the funds was allegedly diverted towards the purchase of luxury vehicles and properties, construction of high-value bungalows and financing of film productions. Some assets were acquired in the names of nominal partners, the ED said.The agency has classified the allegedly diverted funds as “proceeds of crime” under the PMLA. Further investigation is underway to trace the remaining funds, determine outstanding liabilities and establish the complete money trail.
