Three associates of V. Nagaraj were arrested on Friday as part of an investigation into the demonetised currency seized in the house and office of the former councillor. Nagaraj has been on the run after ₹14.8 crore in old notes was seized in April.
According to Additional Commissioner of Police Hemanth Nimbalkar, Saravana (39) and Srinivas (45) would approach businessmen and realtors with an offer to exchange old currency notes through Nagaraj in return for a commission.
Inquiries revealed that Saravana had taken ₹25.6 lakh from one of his contacts Manjunath. He handed over the money to Nagaraj, but the latter refused to hand over new notes.
Saravana had collected demonetised notes from eight persons and handed them over to Nagaraj, who promised to convert them to new notes for a 15 per cent commission, Mr. Nimbalkar said.
Meanwhile, Jaya Krishnan, a bouncer, confessed that he, along with three other bouncers, was employed by Nagaraj. After taking old notes, Nagaraj would refuse to hand over new currency. Whenever people showed up demanding the money, the bouncers would threaten and beat them while Nagaraj pointed a gun at them.
Saravana has handed over to the police a list of people who were cheated by Nagaraj.
A week after the recovery of the money, Nagaraj had released a video clipping in which he accused police officers and government servants of being his customers.
