Investigation by the Enforcement Directorate (ED) into the Vasai-Virar construction scam has uncovered large-scale corruption involving senior civic officials. According to the ED, former Vasai-Virar municipal commissioner Anilkumar Pawar and deputy director of Town Planning YS Reddy collected more than Rs 275 crore in bribes by illegally approving over 5.5 crore sq ft of construction across the city.

As per investigations, Pawar allegedly charged Rs 25 per sq ft, while Reddy demanded Rs 10 per sq ft for issuing approvals. Junior officials, too, shared in the kickbacks, using coded terms such as “A, B, C” to divide the amounts. Much of the money was funnelled through local architects and chartered accountants before being distributed among officials.

The ED has also found that a major portion of the bribe money may have been transferred abroad, with transactions traced in euros and US dollars. Special Public Prosecutor Kavita Patil told the court that the funds may have been moved overseas, requiring an  inquiry at an international level. The case involves 41 unauthorised buildings in Nalasopara.

On August 13, Pawar, Reddy, and two builders, Sitaram Gupta and Arun Gupta, were arrested. A special Prevention of Money Laundering (PMLA) court has remanded all four to 14 days of judicial custody until September 3, while keeping open the option for further ED custody.

Another major finding of the probe is that the tainted money was routed abroad through hawala and angadia operators before being brought back into the accounts of the accused’s relatives to show it as legitimate income. The ED stated that the proceeds of crime were laundered not only in Maharashtra but also across country and borders, stressing the need for an international investigation.

Raids at 12 locations linked to the accused in Vasai-Virar, Mumbai, Pune, and Nashik yielded incriminating material. From a relative’s home in Nashik, Rs 1.33 crore cash and property papers were seized. Searches at Reddy’s premises alone uncovered Rs 8.6 crore in cash, gold and jewellery worth Rs 23.25 crore, and documents pointing to multiple shell companies allegedly used for laundering.

The ED highlighted that fixed rates existed for bribes linked to Commencement Certificates, Occupancy Certificates, and development approvals. Money was also extorted to regularise illegal constructions. The agency described the racket as a “well-oiled nexus” of Pawar, Reddy, builders, architects, accountants, and construction lobbies.

The illegal buildings in Nalasopara stood on 60 acres of reserved land meant for a sewage plant and waste depot. Covering 3.67 lakh sq ft, these units were sold at Rs 1000 to Rs 1200 per sq ft in 2006–07, later rising to Rs 3000–Rs 4000 per sq ft in 2022–23. In July 2024, the Bombay High Court ordered their demolition, a decision upheld by the Supreme Court. On February 20, 2025, the Vasai-Virar Municipal Corporation razed the buildings, displacing nearly 2500 families.

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