Online betting sites operated by K'taka Cong MLA gathered Rs 2,000 crore: ED

New Delhi, Sep 3 (PTI) The Enforcement Directorate on Wednesday alleged that online betting sites "operated" by arrested Karnataka Congress MLA K C Veerendra collected funds worth more than Rs 2,000 crore in a short span of time.

It also claimed that Veerendra, the "prime accused" in a case linked to alleged cheating of public through illegal online betting, and his associates in Dubai were operating several gaming websites by using various gateways and fintech service providers for layering of funds and for masking their "illicit" activities as genuine e-commerce businesses.

The federal probe agency had arrested the 50-year-old Chitradurga MLA late last month from Sikkim where he had gone on a business trip to lease a casino. He is currently in ED custody.

The agency took Veerendra into custody after conducting searches against him, his linked persons, family members and some others in the case.

The ED said in a statement that it conducted fresh searches in the case on Tuesday at Bengaluru and Challakere (Chitradurga district) and seized five luxury vehicles (Mercedes Benz) bearing "VIP numbers" like 0003.

It added that an amount of Rs 55 crore has also been frozen including Rs 40.69 crore kept in nine bank accounts and one Demat account of Veerendra.

Funds worth Rs 14.46 crore kept in 262 mule accounts (bank accounts used for routing criminal money) were recovered from one of the accused payment gateway, through which money collected by multiple gaming websites being operated by Veerendra and his associates, were being routed, it alleged.

The ED said the accused (Veerendra) was running online betting sites like King567, Raja567, Lion567, etc.

It was found that "several" payment gateways have been used for routing payments collected through these websites.

"The money collected from these websites being operated by Veerendra and his associates through single gateway alone is more than Rs 2,000 crore in a short span of time.

"It has been revealed that K C Thippeswamy, brother of Veerendra, is operating three business entities from Dubai named Diamond Softech, TRS Technologies and Prime9Technologies," the ED said.

These entities are related to the call centre services and gaming business of Veerendra, according to the agency.

It is "suspected" that many more such Dubai-based entities like Castle Rock Project Management Services, Lascaux Core Project Management Services, etc. have been "incorporated" by Veerendra in partnership with his brother Thippeswamy, Veerendra's nephew Pruthvi N Raj and a linked person named Anil Gowda among others.

Gowda has challenged ED summons issued to him in this case before the Karnataka High Court stating the notice was a violation of his rights as a professional advocate of Veerendra.

The ED had contended before the high court that it had summoned Gowda not in his capacity as a lawyer but because of his business involvement in the case.

The court has reserved its order while grating interim protection to Gowda-- brother of Kusuma H, the losing Congress candidate from the R R Nagar assembly seat during the 2023 assembly polls-- from any ED action against him.

The ED also alleged that the mule accounts unearthed by it were provided by various "middlemen" to the operators of these gaming websites, in this case Appu alias Pruthvi N Raj, who in turn, used the same to collect the funds received from various players.

"These transactions include layering the said money deposits of players through escrow accounts of gateways and TSPs (token service providers) and then making settlement in mule accounts which are controlled by the gaming site owners.

"These funds were further siphoned off in various ways, including through hawala transactions," it claimed. PTI NES KVK KVK