Former BJP MLC received Rs 3 crore through fake bills for unpaid works, finds Karnataka CID probe

Bengaluru: D S Veeraiah, a former BJP MLC, received Rs 3 crore paid by D Devaraj Urs Truck Terminal Limited (DDUTTL) through fake bills, documents reviewed by DH show. 

Veeraiah, who was the DDUTTL chairman between October 2021 and September 2023, allegedly received the money in his personal bank account from the bank accounts of three Bengaluru-based firms. 

The DDUTTL generated fake bills totalling Rs 39.42 crore for 668 works that were sanctioned but never carried out. Of this, the firms received Rs 3 crore as payment for 665 works they never did. Another Rs 36.42 crore was paid to unidentified contractors and accessory suppliers for the three remaining works. 

The Criminal Investigation Department (CID) is probing whether Veeraiah received some or all of this money (Rs 36.42 crore) from the contractors/accessory suppliers. 

The CID suspects misappropriation to the tune of Rs 47.1 crore in the DDUTTL. 

The CID arrested 78-year-old Veeraiah over the funds misappropriation on July 12 after a Bengaluru court denied him anticipatory bail. 

It has already arrested Shankarappa, a former managing director of the DDUTTL. 

Veeraiah was a member of the Karnataka Legislative Council from 2006 to 2018 and unsuccessfully contested the Lok Sabha election from Kolar in 2009. 

In October 2021, he was appointed chairman of the DDUTTL, a state government entity that builds and runs truck terminals in Karnataka. 

The scam surfaced last year following allegations that DDUTTL board meeting proceedings held between 2021 and 2023 were manipulated, the Karnataka Transparency in Public Procurement (KTPP) Act was violated and bills were generated for works that were never carried out. 

As per the report of an internal compliance audit conducted by the Comptroller and Auditor General (CAG), bills totalling Rs 48.6 crore were generated for 821 works in the DDUTTL.

However, only 153 works amounting to Rs 9.23 crore were actually carried out. The DDUTTL generated created fake bills for 668 works amounting to Rs 39.42 crore. There is no evidence on the ground that these works were ever carried out. 

DH has reviewed the report. 

The CID examined 755 files related to the work orders issued, bills drawn and statements of at least 50 bank accounts linked to the stakeholders. 

It also searched the houses of Shankarappa and Veeraiah, and found "incriminating" documents and concrete leads. 

A scrutiny of the bank accounts of three firms that received Rs 3 crore — SS Enterprises in Rajajinagar, Venisha Enterprises and Mayur Advertisers in T Dasarahalli — showed that the money was directly transferred to Veeraiah's bank account. 

The CID has frozen the firms' accounts and is examining the accounts of other contractors/accessory supplies who received Rs 36.42 crore through fake bills. 

It has booked the firms' proprietors — MS Nandeesh, Naveen Kumar and Gayatri Devi — but all of them have obtained anticipatory bail.