IMA scam
IMA Jewels showroomTwitter

The SIT investigation into the multi-crore IMA fraud has seen a major twist after the investigating officers arrested the assistant commissioner of Bengaluru City police (North) LC Nagaraj on Friday for taking bribe from IMA director Mohammed Mansoor Khan.

LC Nagaraj, who is the assistant commissioner of the revenue department, had received Rs 4.5 crore bribe for issuing a no-objection certificate (NOC) to Khan in order to raise a bank loan. The SIT sleuths have also arrested a village accountant Manjunath for helping Nagaraj carry out the transactions with Khan. This is the first time that government officials have been arrested in connection to the IMA Ponzi scam, which had defrauded nearly 50,000 of its investors.

LC Nagaraj
BCP North Assistant Commissioner (Revenue) LC NagarajTwitter

Nagaraj was appointed by the Karnataka government as a competent authority to probe over the functioning of IMA after the Reserve Bank of India (RBI) issued a circular against the firm. He knew about the financial irregularities committed by IMA but concealed the facts and submitted a clean report favouring the firm. He has been arrested for misusing his position and for extorting money.

Nagaraj, according to sources, had accepted the bribe from Mansoor in three instalments, two instalments of Rs 2 crore each and one of Rs 50 lakh with Manjunath serving as a conduit to transfer the bribe, reports Deccan Herald.

He had earlier claimed that he tried to take actions against IMA and Khan by slapping several notices against the company. Nagaraj was arrested from the Karnataka High Court canteen and his house was also raided by the officials.