The Enforcement Directorate (ED) has arrested two men in connection with an alleged Rs 1,417.86 crore money laundering case involving nearly 36,000 investors who were allegedly duped through fraudulent export-linked investment schemes. S Naveen Kumar and S Muthuselvam were arrested on September 29 under Section 19 of the Prevention of Money Laundering Act, 2002, and were subsequently produced before the Special Court for PMLA cases, which remanded them to 15 days of judicial custody.

The ED said its investigation originated from an FIR registered by the District Crime Branch in Erode under provisions of the PMLA and the Tamil Nadu Protection of Interests of Depositors Act. According to the agency, Kumar, Muthuselvam and their associates operated investment schemes under names including “UNI”, “FNP”, “FAP” and “UNR” through entities such as M/s Unique Exports and East Valley Agro Firms. Investors were allegedly promised high returns linked to profits from agricultural exports.

According to the ED, an analysis of the firms’ finances found that they had conducted virtually no substantial export business and were allegedly being used to operate a fraudulent investment network. The agency said around Rs 1,417.86 crore was collected from 35,759 investors. More than Rs 719 crore was deposited into accounts linked to Unique Exports, while investor funds were allegedly moved through more than 100 bank accounts belonging to associated companies, family members and close aides.

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The agency identified Naveen Kumar, proprietor of Unique Exports, as the alleged mastermind and said he personally controlled the company’s banking operations and movement of funds. The ED alleged that Rs 390.90 crore was falsely recorded as salary payments despite the firm having only four employees. Another Rs 79.56 crore was allegedly shown as purchases of onions and other agricultural commodities even though, according to the agency, no corresponding physical trade took place. Investigators said such entries were used to make illicit fund transfers appear to be legitimate business expenses.

Muthuselvam was also accused of playing a key role in designing the schemes and attracting investors. The ED said he had invested Rs 42.10 lakh but allegedly received Rs 12.72 crore through returns, referral bonuses and commissions. The agency further alleged that he routed funds through his personal bank accounts and entities including M/s Dhanyasree Enterprises and M/s Universe369 Infra Private Limited.

The arrests followed ED searches at nine premises linked to the case on June 16 and 17 under Section 17 of the PMLA. The agency said its investigation is continuing, including efforts to trace assets and establish the wider financial network involved in the alleged scheme. The allegations against the accused are part of the ongoing investigation, and the court proceedings will determine the legal status of the claims.

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