Non-bailable warrant issued against NAMCO Bank scam mastermind

There is a pending Interpol Red Corner Notice as well against the accused, who allegedly left the country last year when the irregular transactions first surfaced

MUMBAI: Acting on a request from the Enforcement Directorate (ED), a special court on Tuesday issued a non-bailable warrant against Mehmood Bhagad alias Challenger King, the absconding kingpin in the 198.41-crore suspicious transactions through the Nashik Merchant Co-operative (NAMCO) Bank and the Bank of Maharashtra (BOM), both in Malegaon. There is a pending Interpol Red Corner Notice as well against the accused, who allegedly left the country last year when the irregular transactions first surfaced.

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Bhagad did not comply with the ED’s three summonses issued in June and August this year, requiring him to appear before the investigating team. “All three summonses were sent through the postal department as well as via email,” the ED told the court, adding that Bhagad was deliberately not cooperating with the investigation.

The case was first registered on November 7, 2024 at the Malegaon Chawani Police Station on the depositing of an estimated ₹100 crore-plus in 12 newly opened accounts in NAMCO Bank. The case was against a local trader and his accomplice who allegedly used the identity documents of various persons, obtained with false promises of paying money. Based on the Malegaon police’s case, the ED began its investigation the same month. Its probe revealed 14 accounts in NAMCO bank and five accounts with BOM.

Considering the serious nature of the crime, the investigation was transferred from the Malegaon police to the Maharashtra Anti-Terrorism Squad (ATS), which re-registered the case on December 16, 2024, under sections of the Bharatiya Nyaya Sanhita. Bhagad was named as a ‘wanted accused’ in the ATS chargesheets, and an Interpol Red Corner Notice was issued against him.

The court said that despite issuance of the summonses, Bhagad, the “ultimate beneficiary of the proceeds of crime” (PoC), had not cooperated in the investigation. “There are allegations of money-laundering in respect of huge PoC to the tune of ₹198.41 crore. In the interests of a proper and effective investigation and trial into the serious economic offence, it is necessary to issue a non-bailable warrant against the accused,” the court observed while granting the ED’s application for the issuance of a non-bailable warrant.

The ED’s probe accused Bhagad of involvement in all the processes related to the PoC and of managing a sophisticated network of mule accounts to route illicit funds derived from illegal online gaming and betting apps. It accused him of money-laundering by directly indulging in activities connected with the PoC, including their concealment, possession, acquisition and use.

The investigative agency alleged that the case represented a planned conspiracy, orchestrated by the accused along with the co-accused, through which there was a generation of PoC worth around ₹198.41 crore (identified so far) in the form of cash withdrawn from various mule accounts. Funds worth ₹7.7 crore were also allegedly remitted abroad from the bank accounts of two shell entities, which had received funds from the NAMCO Bank and BOM accounts, for bogus software imports, thereby causing a loss to the country’s foreign exchange.