The Directorate of Enforcement (ED) has arrested the former managing director of Jaypee Infratech (JIL), Manoj Gaur, under the Prevention of Money Laundering Act (PMLA) for allegedly defrauding homebuyers.

The probe was launched following multiple FIRs registered by the Economic Offences Wings (EOW) of the Delhi and Uttar Pradesh Police, based on complaints from buyers of the Jaypee Wishtown and Jaypee Greens projects. The complaints accused the company and its promoters of criminal conspiracy, cheating, and criminal breach of trust.

ED has alleged that the funds collected from thousands of homebuyers for construction and completion of residential projects were diverted for purposes other than construction, leaving the homebuyers defrauded and their projects incomplete.

ED investigation has revealed that out of approximately Rs 14,599 crore collected by Jaiprakash Associates and JIL from homebuyers (as per claims admitted by NCLT), substantial amounts were diverted for non-construction purposes and siphoned off to related group entities and trusts, including Jaypee Sewa Sansthan (JSS), M/s Jaypee Healthcare (JHL), and M/s Jaypee Sports International (JSIL).

The ED investigation also revealed that Gaur is the managing trustee of Jaypee Sewa Sansthan, which received part of the diverted funds.

Earlier on May 23, the ED had conducted search operations at 15 locations in Delhi, Noida, Ghaziabad, and Mumbai, including the offices and premises of Jaiprakash Associates JIL. “During the searches, ED seized a large volume of financial and digital records, along with documents evidencing the offence of money laundering and diversion of funds,” the agency said in a statement.

The agency said that investigation has established the central role of Gaur in the planning and execution of the fund diversion through a complex web of transactions within the Jaypee Group and its associated entities.