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Businessman Sujit Patkar, a friend of Shiv Sena-Uddhav Balasaheb Thackeray MP Sanjay Raut, is the main person who orchestrated the fraud of over Rs 31 crore in the jumbo COVID-19 treatment centres in Mumbai, the Enforcement Directorate told a court in Mumbai.
The probe agency, while seeking Patkar's custody, also told the court that an offence of such magnitude was not possible without the "explicit complicity of senior functionaries" of the Brihanmumbai Municipal Corporation.
The ED arrested Patkar and doctor Kishore Bisure on Wednesday night.
The two were produced before the special judge for Prevention of Money Laundering Act cases M G Deshpande on Thursday, which remanded them in the ED custody till July 27 for their alleged role in the money laundering case.
Patkar and his three partners are accused of fraudulently bagging contracts from the BMC for setting up or managing COVID-19 field hospitals -- called 'jumbo centres' -- in the city during the pandemic.
Bisure was the dean of a jumbo center at Dahisar.
The central probe agency, represented by special public prosecutor Kavita Patil, sought their custody for eight days, saying it needed to interrogate them to unearth the conspiracy and layering of the funds.
The ED told the court that during the pandemic that broke out in March 2020, the municipal corporation had established jumbo COVID centres to overcome the issues of scarcity of beds for COVID-19 patients in all available hospitals in the jurisdiction of Mumbai.
Investigation revealed that Lifeline Hospital Management Services received Rs 31.84 crore from the BMC for supply of medical personnel to COVID centers.
Lifeline Hospital Management Services, owned by Patkar and his three partners, was a new company established in June 2020 and was granted contract despite not having any experience of providing medical personnel or services, it said.
The ED said that during the investigation, it came across huge discrepancies in the attendance sheets and documents submitted to the BMC by the firm.
In this regard, letters were issued to doctors, nurses and staff reportedly engaged in jumbo Covid centres of Lifeline Hospital Management Services, but most of these letters were returned undelivered to the postal authorities.
Some of the doctors/staff in their replies submitted that they never worked in these Covid centres. However, they stated that they appeared for interviews and submitted their personal records to the firm, the probe agency said.
But on the instructions of Patkar and other partners of the firm, they were shown as regular employees/staffers providing their services in suburban Dahisar and NSCI Worli jumbo Covid centres in the attendance bills submitted to the BMC, it said.
Some doctors/staff replied that they worked for a short period, but their attendances were shown for longer periods, the ED said.
Patkar fabricated the bills, despite huge under-deployment of medical staff to the extent of about 50 per cent and the same were submitted to BMC authorities, it alleged.
It is revealed that Patkar used to liaison with BMC officials and played a key role in the process of allotment of contract of manpower supply to jumbo Covid centres, and also managed Bisure and other BMC staffers for clearing invoices, the ED said.
Bisure was heading the BMC team stationed at Dahisar jumbo Covid centre and he was required to ensure its proper functioning.
However, he was hand in glove with partners of Lifeline Hospital Management Services and did not ensure the required number of medical staff in the centre. He rather allowed/approved the fabricated bills, it said.
In view of the above facts, it is clear that the accused have played a very crucial role in the offence of money laundering. Sustained interrogation under custody is required to unearth the trail of funds, for corroboration and confrontation with other persons involved in the case, the ED submitted.
"Patkar is the main person who orchestrated and affected this fraud amounting to Rs 31.84 crore by obtaining tender to their firm Lifeline Management Services. He also managed manipulation of attendance sheets and fraudulently raised bills to be submitted to BMC Authorities," the ED said.
BMC officers, dean of jumbo Covid centres and others also being in connivance for personal financial gains verified these fake and fabricated bills, which resulted in payment of Rs 31.84 crore, it added.
Opposing the remand application, Patkar's lawyer Subash Jha said, "There are four partners in the firm, so why is the probe agency making selective arrests?"
An FIR was registered at the Azad Maidan police station in August 2022 and the case was transferred to the Economic Offences Wing of Mumbai police, which filed the chargesheet in the case. But Patkar was not shown as a witness, absconding or wanted accused in the case, he said.
"The ED filed its ECIR (case) in November 2022, based on the Mumbai police's case. Their investigation is shrouded in mystery. They need to explain what took them so long to arrest the accused in the case," the lawyer submitted.
"This is nothing but an attempt to overreach the process of law," he claimed, citing the provisions of the Disaster Management Act.
The special court, after hearing both sides, said that thorough investigation was necessary and if the remand application is rejected the very purpose of investigation under PMLA will be paralysed.
The court then remanded the accused in ED custody.