Brokered trusts, buyer losses: Jaypee Infratech fraud exposed
The Enforcement Directorate (ED) on Thursday arrested Manoj Gaur, former MD of realty company Jaypee Infratech Ltd, in a money laundering case probe linked to Rs.14,599 crore alleged fraud with home buyers. The businessman was taken into custody under the provisions of the Prevention of Money Laundering Act (PMLA), they said. The agency said that funds collected from home buyers were diverted to various trusts, leaving the projects incomplete and investors cheated.
The ED found that Gaur is the Managing Trustee of Jaypee Sewa Sansthan (JSS), which received part of the diverted funds. The investigation against him pertains to a case of alleged cheating of home buyers, the officials said. “The ED initiated investigation against Jaypee group on the basis of multiple FIRs registered by the Economic Offences Wings (EOW) of Delhi and Uttar Pradesh Police, based on complaints filed by home buyers of Jaypee Wishtown and Jaypee Greens projects, alleging criminal conspiracy, cheating, and criminal breach of trust against the company and its promoters,” the agency said in a statement.
ED said that the funds collected from thousands of home buyers for the construction and completion of residential projects were diverted for purposes other than construction, leaving the home buyers defrauded and their projects incomplete. “The ED investigation revealed that out of approximately Rs.14,599 crore collected by JAL and JIL from home buyers (as per claims admitted by NCLT), substantial amounts were diverted for non-construction purposes and siphoned off to related group entities and trusts, including Jaypee Sewa Sansthan (JSS), M/s Jaypee Healthcare Ltd. (JHL), and M/s Jaypee Sports International Ltd. (JSIL),” the statement said.
The ED had conducted searches on May 23 at 15 locations in Delhi, Noida, Ghaziabad, and Mumbai, including the offices and premises of Jaiprakash Associates Ltd. And Jaypee Infratech Ltd. “During the searches, the ED seized a large volume of financial and digital records, along with documents evidencing the offence of money laundering and diversion of funds,” the statement said. The ED investigation has established the central role of Gaur in the planning and execution of the fund diversion through a complex web of transactions within the Jaypee Group and its associated entities, the agency alleged.
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