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The Directorate of Enforcement (ED), Bengaluru zonal office, conducted searches at 14 locations across Bengaluru, Mysuru, and Belagavi on Wednesday under the Prevention of Money Laundering Act (PMLA), 2002, in connection with an alleged corruption racket in the Karnataka Excise Department.
The searches were carried out following a case registered by the Karnataka Lokayukta Police against senior Excise officials for allegedly collecting favours in exchange for processing and issuing various Excise licences and amassing wealth disproportionate to their sources of income.
According to the ED, its investigation was strengthened by complaints and documents indicating that the accused laundered funds through the purchase of movable and immovable assets, benami transactions and investments in businesses operated through family members and associates.
The key individuals covered during the searches include Excise officials Jagdish Nayak, K.M. Thammanna and Y.D. Manjunath, along with their family members, business partners and associates.
The ED claimed that the department functioned as an organised syndicate involving public officials, intermediaries and private individuals engaged in systematic collection and distribution of bribes.
The investigators alleged that liquor outlets paid fixed monthly bribes to field-level officers. Additional illegal payments were allegedly collected during licence renewals, transfers and issuance of fresh licences. The money was reportedly pooled centrally and distributed through intermediaries who maintained unofficial records.
An alleged cash ledger documenting such transactions was seized during the searches. The agency further alleged that the illicit proceeds were used by the officials for personal expenses and investments.
In a significant finding, the ED said several officials allegedly obtained liquor licences in the names of their family members or entities controlled by them and operated businesses indirectly.
The agency suspects that income from these businesses was projected as legitimate earnings to integrate the proceeds of crime into the formal economy.
During the raids, the ED officials seized digital devices, property-related documents and other incriminating material. The searches led to the seizure of ₹5.5 crore in cash, gold jewellery valued at around ₹7.8 crore and ₹3.3 lakh in foreign currency.
The recoveries were made from premises linked to Y.D. Manjunath, his driver, family members, and associates.
According to the ED, the total proceeds of crime seized so far amount to approximately ₹13.3 crore.
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