ED Files Fresh Complaint Against Mehmood Bhagad in Rs 157 Crore Malegaon Case
The Enforcement Directorate (ED) has filed its third supplementary prosecution complaint before the Special Court under the Prevention of Money Laundering Act (PMLA) in Mumbai against Mehmood Abdul Samad Bhagad alias "Challenger King" in connection with the Malegaon money laundering case. The complaint, submitted on October 1, alleges that Bhagad and his associates operated a network of shell entities and mule bank accounts to route over Rs 157 crore derived from cyber fraud and illegal online betting.
The court filing follows Bhagad's arrest in the United Arab Emirates and his subsequent deportation to India. An Interpol Red Corner Notice had been issued against him in February 2025, nearly two years after he fled the country as financial investigators began closing in on the syndicate.
The money laundering investigation originated from a November 2024 FIR registered at the Malegaon Chhawani Police Station in Nashik. The initial police case was lodged after more than Rs 100 crore was deposited into 14 newly opened accounts at the Nashik Merchant Co-operative Bank (NAMCO Bank). Those accounts had been opened using identity documents taken from local residents on the pretext of offering them jobs or monetary benefits.
The ED subsequently expanded the inquiry and uncovered five additional mule accounts at the Bank of Maharashtra, bringing the total to 19 across the two institutions. The agency found that the 14 NAMCO accounts had received credits exceeding Rs 112.72 crore from approximately 200 firms within a span of one to two months before being moved via online banking. The money trail eventually led investigators to 21 sole proprietary concerns handling transactions worth hundreds of crores.
According to the ED, Bhagad actively directed the creation and operation of these dummy structures rather than serving merely as a beneficiary. The agency stated that associates Nagani Akram Mohammad Shafi and Vasim Valimohmad Bhesaniya set up the shell entities on Bhagad's instructions, after which the accounts took in more than Rs 157 crore. Both Shafi and Bhesaniya were arrested by the ED in December 2024 for withdrawing funds and passing the cash to angadia and hawala operators across Mumbai, Ahmedabad, and Surat.
The agency further alleged that Bhagad integrated cryptocurrency into the operation by selling USDT to cyber fraud and illegal betting operators. In return, the buyers transferred equivalent amounts in Indian currency into the syndicate's mule accounts.
Prior searches conducted across Mumbai, Malegaon, Surat, and Ahmedabad yielded incriminating documents, Rs 15 crore in seized cash, and the freezing of Rs 34 crore across various bank accounts. The ED has also provisionally attached assets valued at Rs 95 lakh in the ongoing case.
