Rs 2,400 cr Aarudra gold scam: ED launches raids across TN

CHENNAI: The Enforcement Directorate (ED) conducted searches across Tamil Nadu on Wednesday as part of its money laundering investigation into the massive Aarudra Gold investment scam, in which thousands of investors were allegedly duped of approximately Rs 2,400 crore.

The raids targeted 15 locations in Chennai, Kancheepuram, and Vellore districts. ED teams, accompanied by CRPF personnel, carried out simultaneous operations. In one instance, a team arriving at a house in Mogappair East found it vacated, prompting a subsequent search in Tirumangalam.

The ED's case is based on a 2022 FIR filed by the Economic Offences Wing (EOW), which alleged that the now-defunct Aarudra Gold Trading Private Limited lured investors with an extravagant promise of 30% monthly interest, a 5% referral commission, and a one-gram gold coin for every Rs 1 lakh deposit.

The scheme, which began in 2021, collapsed when it failed to honour the commitments. Prior to the ED's involvement, the EOW had already taken action, freezing 170 bank accounts holding Rs 102 crore and seizing 93 properties worth around Rs 96 crore, while also arresting 11 key accused.

The search operations are expected to continue on Thursday.

The scam is a classic Ponzi scheme that operated primarily in Tamil Nadu, leveraging the allure of high returns and the trust associated with gold to defraud thousands of investors – most of them from middle-class and lower-income backgrounds.

The scam began to crumble in 2022 when the company could no longer sustain the payouts as the number of investors grew, leading to a cascade of complaints.

The main suspects are M Nagesh, managing director of Aarudra Gold and is considered the main architect of the scheme; S Sridharan, key partner and promoter of the company; and Nagesh’s wife, M Nirmala, who was also deeply involved in the company's operations.