Illegal construction `scam`: ED raids multiple places in Mumbai, Hyderabad

The Mumbai Zonal Unit of the Directorate of Enforcement (ED) on Thursday conducted raids at 13 locations across Mumbai and Hyderabad and seized cash and jewellery worth Rs 32 crore in Vasai-Virar `illegal construction scam`, officials said.

The search operations were conducted on May 14 and 15, 2025 under the Prevention of Money Laundering Act (PMLA), 2002, they said.

According to the ED, the searches led to the seizure of approximately Rs 9.04 crore in cash and diamond-studded jewellery and bullion worth around Rs 23.25 crore.

A large number of incriminating documents were also recovered, said the officials.

The ED said that an investigation was launched based on several FIRs registered by the Mira Bhayandar Vasai Virar (MBVV) Police Commissionerate. The cases relate to the illegal construction of residential and commercial buildings on government and private land under the jurisdiction of the Vasai Virar Municipal Corporation (VVMC) since 2009.

It said that at least 41 illegal buildings were constructed on land reserved for a sewage treatment plant and dumping ground, as per the city`s approved development plan. Builders and developers are accused of cheating the public by constructing and selling flats in these unauthorised buildings using fake approval documents. Many buyers were misled, despite the developers knowing the buildings would eventually be demolished.

The Bombay High Court, on 8 July 2024, ordered the demolition of all 41 illegal structures. A plea filed by the affected families in the Supreme Court was later dismissed. The demolition was carried out by VVMC on 20 February 2025. Thereafter, a petition was filed before the Supreme Court by the families residing
in 41 illegal buildings which was dismissed.

The demolition of all 41 buildings was completed by VVMC on February 20, 2025.

ED investigation revealed that the large scale illegal construction in the area has been going on since 2009. It has been found that the key perpetrators of the large scale scam in jurisdiction of Vasai Virar Municipal Corporation are Sitaram Gupta, Arun Gupta and others.

Officials said that during the course of investigation it has been found that these unauthorised or illegal buildings were constructed with close connivance of various VVMC officials.

The investigation has revealed collusion between the builders and certain officials of VVMC. During a search at the residence of Y. S. Reddy, Deputy Director of Town Planning at VVMC, authorities seized Rs 8.6 crore in cash and valuables worth Rs 23.25 crore.

Incriminating documents found during the searches shed further light on the large-scale scam, exposing deep-rooted corruption and unauthorised construction activities within the Vasai-Virar region.

This article first appeared on Mid Day