ED chargesheets 6 KVIC staff in Rs 3.89 crore fraud

March 25, 2026

The Enforcement Directorate (ED) has filed a chargesheet against six employees of the Khadi and Village Industries Commission (KVIC) in connection with an alleged financial fraud involving ₹3.89 crore. The pertains to the alleged siphoning off of government funds meant for promoting rural industries.

The chargesheet has been filed under provisions of the Prevention of Money Laundering Act (PMLA), indicating serious financial irregularities and suspected laundering of funds.

Allegations of Fund Diversion

According to the ED, the accused employees were involved in misappropriating funds allocated under KVIC schemes. These schemes are designed to support rural employment and promote traditional industries like khadi and village-based enterprises.

Investigators found that the accused allegedly diverted ₹3.89 crore through fraudulent means, including manipulation of records and misuse of official positions. The siphoned funds were reportedly routed through various channels to conceal their origin.

Modus Operandi Revealed

The probe revealed that the accused individuals used fake or inflated claims and forged documentation to withdraw funds illegally. In some cases, funds meant for beneficiaries were allegedly redirected into accounts controlled by the accused or their associates.

The ED’s investigation suggests a well-planned conspiracy, where official authority was misused to bypass checks and siphon off money without immediate detection.

Attachment of Assets and Evidence

During the course of the investigation, the ED carried out searches and reportedly recovered incriminating documents and evidence linked to the financial transactions. Authorities have also taken steps to trace and attach properties acquired using the незаконные funds.

Such actions are part of the agency’s effort to ensure recovery of public money and prevent further misuse.

Legal Proceedings Underway

The prosecution complaint (chargesheet) has been filed before a special PMLA court, which will now examine the evidence and proceed with the trial. If proven guilty, the accused could face stringent punishment, including imprisonment and financial penalties.

Officials stated that further investigation is ongoing and more individuals may come under scrutiny if additional evidence emerges.

Impact on Rural Development Schemes

The case has raised concerns about the misuse of funds meant for rural development. KVIC plays a crucial role in generating employment in villages, and such fraud cases undermine the effectiveness of these schemes.

Experts have stressed the need for stricter monitoring mechanisms and transparency to prevent corruption in welfare programs.