ED attaches Rs 427 crore in assets over alleged Rs 2,459-crore Belagavi Ponzi scheme
The ED says it has provisionally attached Rs 427.16 crore in assets in an alleged Rs 2,459-crore Ponzi scheme in Belagavi, Karnataka, that allegedly cheated over 35,000 investors. The accused are alleged, not convicted; the investigation continues.
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Source: thehindu.com · published
What happened
India's Enforcement Directorate (ED) has provisionally attached movable and immovable assets worth Rs 427.16 crore belonging to Shivanand Siddappa Neelannavar, whom the ED describes as the alleged kingpin of a large Ponzi scheme in Belagavi, Karnataka, and to people and entities associated with him. The Hindu reported on 31 October 2026 that the order was issued by the ED's Mangaluru Sub-Zonal Office under the Prevention of Money Laundering Act (PMLA), 2002, in an alleged investment fraud involving proceeds of crime of about Rs 2,459 crore. According to the report, more than 35,000 investors were allegedly cheated. These are the ED's allegations; no finding of guilt has been reported.
How the scam works
The ED says a large share of the money collected from investors was diverted into high-risk stock-market trading, which resulted in net losses of Rs 185.95 crore. It alleges that other money was moved into fixed deposits that were then used as security for loans taken in the names of associates to buy land, that funds were sent to the accounts of close family members, and that money was put into business ventures. One of those, Shivam Sevaa (OPC) Pvt. Ltd., allegedly received Rs 19 crore. The ED identified 42 immovable properties, including agricultural plots, family bungalows and apartment bookings, along with financial assets such as fixed deposits, bank balances and shares.
The report says Neelannavar was arrested on 13 August 2026. On 9 October the ED filed a prosecution complaint before the PMLA court in Mangaluru seeking prosecution of five accused persons and entities, including him. Further investigation is under way. A provisional attachment is a step to preserve assets while the case proceeds; it is not a conviction.
Ponzi-style schemes pay earlier investors from new deposits rather than real profits. They tend to attract many small investors with promises of steady returns, and they collapse when new money slows.
Source
The Hindu, “ED attaches assets worth ₹427 crore in ₹2,459-crore Belagavi Ponzi scam”, The Hindu Bureau, 31 October 2026.
Red flags
- Promises of high, steady or guaranteed returns on deposits or investments.
- An investment scheme run through unregistered or loosely regulated entities rather than a licensed firm.
- Returns paid from newer investors' money, with little information on how profit is earned.
- Pressure to bring in friends and family or to reinvest instead of withdrawing.
- Funds moved into unrelated businesses, property or accounts of relatives.
If you were targeted
- 1Check whether any entity taking deposits or offering investments is registered with RBI, SEBI or the relevant state authority.
- 2Be wary of returns far above bank or market rates, however many people you know have joined.
- 3If you invested with entities named in the case, follow official notices from the ED and the investigating agencies about claims.
- 4Keep records of payments, receipts, agreements and messages in case you need to file a complaint.
- 5Report suspected deposit or investment fraud to local police, the cyber-crime helpline 1930 or the relevant regulator.