THE DIRECTORATE of Enforcement (ED), Kolkata Zonal Office, has taken action against an alleged multi-crore investment fraud, conducting search operations and freezing substantial assets linked to M/s LFS Broking Pvt Ltd and its associates. The ongoing investigation, initiated under the Prevention of Money Laundering Act (PMLA), 2002, has till date identified Proceeds of Crime (POC) amounting to approximately Rs 266 crore, with this figure expected to rise, officers said on Friday.
During the search operations, the ED froze 118 bank accounts suspected of being connected to the “illicit activities” , a statement said. Also, 63 immovable properties, collectively worth several crore rupees, have been prohibited from sale or transfer. Thesep frozen assets include two hotels, a resort, various land parcels, a residential bungalow, several flats, and notably, a property located in Eagle Heights, Dubai. The market value of these properties is being ascertained, the statement said.
In connection with the case, two persons, Dilip Kumar Maity and Md Anarul Islam, were arrested recently under Section 19 of the PMLA, 2002. They were subsequently produced before a Special Court (PMLA), Kolkata, which granted the ED their custody for 11 days for further interrogation.
The alleged fraud centres around the fraudulent mobilisation of investments from the public through false promises of exorbitant returns. Investigations reveal that the arrested individuals, along with the alleged mastermind Saiyad Jiyajur Rahaman (now in judicial custody in Bhubaneswar, Odisha), managed the operations of LFS Broking Pvt Ltd while the firm was a SEBI-registered entity for share broking and investment activities, the accused allegedly established and operated another firm, “LFS Broking and PMS Services,” utilising a similar name to allegedly deceive investors.
Investors were initially led to believe their funds were being channeled through the SEBI-registered LFS Broking Pvt. Ltd. However, the monies were instead routed to “LFS Broking and PMS Services” and subsequently laundered through a complex web of companies and firms. These funds were then used to acquire a diverse range of movable and immovable assets, including hotels, resorts, and international properties.
According to the ED, the accused employed various manipulative tactics, including seminars, online advertisements, and social media campaigns, to lure investors with inflated promises of returns. This fraudulent network gradually expanded across multiple states, leading to numerous FIRs being registered against the company and its associates after they failed to return the invested capital. In 2024, SEBI revoked the company’s registration after the fraud came to light.