The Enforcement Directorate (ED) has arrested three key accused in the multi-crore Indore Municipal Corporation (IMC) fake bill scam, officials confirmed on Wednesday. The agency's Indore Sub-Zonal Office took Abhay Singh Rathore, Mohd. Zakir and Rahul Badera into custody on 1 June under the Prevention of Money Laundering Act (PMLA), 2002, in a case that has quantified proceeds of crime at around ₹92.76 crore.

The trio was produced before the Indore Special PMLA Court, which remanded them to ED custody till 5 June for further questioning.

How the scam unfolded

The ED probe was initiated on the basis of multiple FIRs and charge sheets filed by the MG Road police station in Indore under various sections of the Indian Penal Code. The cases relate to the fraudulent withdrawal of funds from the IMC treasury through fake bills, forged work orders, fabricated records and non-existent project works.

According to the agency, between 2018 and 2023, fake and bogus bills worth around ₹119.53 crore were submitted to the corporation for works that were never executed. On the strength of these forged documents, roughly ₹86.54 crore was fraudulently disbursed from the municipal treasury.

Investigators have also established that prior to 2018, an additional ₹6.22 crore was siphoned off using similar methods, taking the total proceeds of crime to about ₹92.76 crore.

Role of the accused

Rathore, who was serving as an assistant engineer in the IMC, has emerged as a principal conspirator, allegedly playing a key role in preparing and processing fake work orders that enabled the fraud, according to the ED.

Contractors Zakir and Badera, through firms controlled by them, reportedly received around ₹71.78 crore against these bogus bills. The accused are alleged to have submitted fabricated documents and ensured payments were released without any actual work being carried out, causing substantial loss to the civic body.

Earlier ED actions

In previous rounds of action, the ED conducted searches and seized cash and valuables worth around ₹22.04 crore. Immovable properties valued at approximately ₹34 crore were provisionally attached on 3 July 2025.

The agency said these actions have helped trace part of the laundered funds and that it is continuing its investigation to recover the remaining proceeds of crime, identify additional assets and uncover the full money trail.

Why it matters

The case has flagged serious governance concerns in municipal financial management in one of Madhya Pradesh's largest urban bodies. Critics argue that the diversion of funds meant for civic works over a five-year window points to systemic lapses in internal audit and vendor verification at the IMC. Further arrests and attachments are expected as the ED widens its probe into the money trail.