Mumbai: The Enforcement Directorate (ED) on Tuesday conducted search operations at 16 locations across the Vasai-Virar region along with the western suburbs of Mumbai including Kandivali and Juhu, as part of a money laundering probe into the unauthorised construction of 41 buildings on 60 acres of civic land reserved for sewage treatment and dumping grounds.

The ED’s investigation is focused on a well-organized nexus involving politicians, builders, corrupt VVMC officials, liaison agents, local henchmen, and document forgers who allegedly facilitated the illegal construction through forged approvals, fabricated sale deeds, and manipulated zoning clearances.

Agency sources said the second round of searches primarily targeted the residential and office premises of architects allegedly responsible for designing the unauthorized buildings, as well as liaison agents and VVMC insiders accused of playing key roles in legitimizing the illegal structures.

In May, the agency had raided 13 locations across Nalasopara, Vasai, Virar, and Hyderabad, seizing unaccounted assets worth over Rs 32 crore. This included approximately Rs 8.6 crore in cash, diamond-studded jewellery, and bullion worth Rs 23.25 crore recovered from the residence of Yumiganu Shiva Reddy, Deputy Director of Town Planning at VVMC. Additionally, Rs 45 lakh in unaccounted cash was recovered from a concealed metal cupboard at the premises of former Bahujan Vikas Aghadi (BVA) corporator Sitaram Gupta.

Agency sources said that the second round of searches are mainly covering the liasoning officers, architects and the middlemen who were allegedly coordinating between builders and the VVMC officials.

The ED's money laundering investigation is anchored in multiple FIRs registered by the Mira-Bhayandar Vasai-Virar Police Commissionerate against builders, local henchmen, and others for illegal land grabbing, unauthorized development, and the construction of residential-cum-commercial buildings on government and private land under the jurisdiction of the Vasai-Virar Municipal Corporation (VVMC) since 2009.

Documents seized during earlier searches, along with the statement recorded from Yumiganu Shiva Reddy, Deputy Director of Town Planning at the Vasai-Virar City Municipal Corporation, and former Bahujan Vikas Aghadi (BVA) corporator Sitaram Gupta, have pointed to the alleged complicity of senior VVMC officials in facilitating a large-scale construction scam, the official added.

According to the Enforcement Directorate, the 41 unauthorized buildings were constructed between 2010 and 2012 on the land that had been officially reserved for a sewage treatment plant and dumping ground, as per the approved development plan of Vasai-Virar city. “The accused builders and developers violated zoning and land-use norms with impunity, deceived the public by constructing illegal buildings on reserved land, and later sold these units using fabricated approval documents."

The ED investigation alleged that the developers were fully aware the structures were unauthorized and likely to be demolished, yet continued to sell units to unsuspecting buyers. “Even with prior knowledge that these buildings were unauthorised and would eventually be demolished, the developers misled the people by selling rooms in these buildings, thereby committing serious fraud,” the agency added.

The 41 buildings were ultimately demolished on February 20, 2025, by the order of Bombay High Court, which the Supreme Court later upheld. Families living in these buildings were left homeless.

The agency has identified key accused in the alleged scam, including Sitaram Gupta and Arun Gupta, among others.

VVMC’s Deputy Director of Town Planning, Yumiganu Shiva Reddy at the centre of the ED probe was previously arrested by the Thane unit of the Anti-Corruption Bureau (ACB) in April 2016 for allegedly offering Rs 25 lakh to a Shiv Sena corporator in an attempt to stop him from pursuing court cases against him.