The role of a senior executive of a payment gateway firm has come under scrutiny in an Enforcement Directorate (ED) investigation into alleged money laundering of over Rs 2,000 crore by illegal online betting and gaming apps operated by arrested Karnataka Congress MLA K C Veerendra Puppy.ED has named Gulshan Khattar, a director associated with Fonepaisa Payment Solutions Ltd, as a key associate of Puppy, 43, who helped funnel funds from the MLA’s illegal online betting operations by various means.ED has alleged in case documents, which have been placed in the courts in Bengaluru, that Gulshan Khattar “funded a Range Rover bearing no. KA45N0003” that was being used by the MLA.ED has stated in a grounds-of-arrest document that the MLA’s nephew Pruthvi N Raj (Appu) met the Fonepaisa Solutions executive at the Majestic Pride casino in Goa and made a business proposal to route funds from Puppy’s online betting businesses through the payment gateway.Following searches conducted on properties belonging to Gulshan Khattar—after the registration of an Enforcement Case Information Report (ECIR) on July 22—ED is reported to have learnt about the payment gateway’s association with the MLA’s betting businesses.Khattar reportedly “claimed to have met Appu at Majestic Pride Casino, where he stated that he was involved in online betting business and requested to provide service of payment gateway of the said app” ED has indicated. The Fonepaisa executive has reported that he accepted the proposal on the basis of an agreement for commissions.Several online betting sites run by Veerendra Puppy“Further investigation has revealed that the accused is running several online betting sites in the name of King567, Raja567, Lion567, Play567, Playwin567, etc. It has also been revealed that several gateways have been used for routing payments collected through these websites,” the ED said in a statement issued on Wednesday.ED has alleged in arrest documents that the MLA is “linked to Fonepaisa Payment Solutions, which is alleged to have processed illegal funds for the illegal gaming platforms”.Story continues below this adED has argued in the court that it needs to further investigate the MLA’s financial activities since the investigation of one of nine payment gateways alone had revealed a transfer of Rs 2,000 crore. It has stated that the money collected from betting sites like King567, Raja567, and Lion567 operated by the MLA and his associates “through a single gateway alone is more than Rs 2,000 crore in a short span of time”.‘14.46 crore in 262 mule accounts’The ED investigation has reportedly also revealed the use of hundreds of mule accounts for routing the funds collected from the online betting and gaming sites operated by the MLA. The mule accounts are provided by various middlemen at the instance of several people, including Appu, according to the agency.As much as 14.46 crore has been found in 262 mule accounts linked to “one of the accused gateways through which money collected by multiple gaming websites operated by K C Veerendra and his associates were being routed”, ED has stated.“These transactions include layering the said money deposits of players through escrow accounts of gateways and TSPs and then making settlement in mule accounts which are controlled by the gaming site owners. These funds are further siphoned off in various ways, including through hawala transactions,” the ED has alleged.Story continues below this ad“It has also been revealed that K C Veerendra and associates in Dubai are operating several gaming websites by using various gateways and Fintech service providers for layering of funds and for masking their illicit activities as genuine e-commerce businesses,” ED has claimed.The Congress MLA and his associates are alleged to have laundered the money from illegal betting in the form of gold, cash, and cryptocurrency through “entities of Khattar, Gowda Ramani, and Mehta”. While Khattar is linked to Fonepaisa, Gowda is reported to be Anil Gowda H, a business associate of Puppy who became an advocate in 2022.Assets worth Rs 100 crore seized: EDED has reported the seizure of properties worth Rs 100 crore linked to the proceeds of the illegal betting operations run by the MLA and his associates, including several high-end cars held in the name of private firms linked to the MLA’s associates, gold, and jewelry worth Rs 24 crore.On Thursday, ED told the Karnataka High Court that Anil Gowda, who has challenged a summons issued by the agency, had a 15 per cent stake in a firm where he was a partner with Puppy and received Rs 29 crore during the association.Story continues below this adA Mercedes Benz GLS 400 ( worth Rs 1.1 crore) bearing the number KA55P0003, which was being used by Puppy, was registered in the name of ABH Infrastructures, a firm linked to Anil Gowda, ED has also alleged. The challenge to the ED summons to Anil Gowda is to be heard again on September 15.Anil Gowda is the brother of Kusuma H, the unsuccessful Congress candidate for Bengaluru’s RR Nagar seat in the 2023 Assembly elections.Gowda has claimed that ED is trying to investigate his professional alliance as a lawyer with Puppy’s firms. However, ED has claimed that it is interested in Gowda’s role as a business associate of Puppy rather than his role as an advocate.No FIR, no summons: Veerendra Puppy’s counselPuppy’s counsel have argued in the courts that the ED case is without a legal basis since there were no predicate offences pending against him as claimed by ED in its grounds of arrest on August 23.Story continues below this adThe counsel have also argued that Puppy is not named in any FIR that has alleged fraud against online betting apps. There were also no summons issued under section 50 of the Prevention of Money Laundering Act (PMLA) for the MLA after an ECIR was registered in July and ahead of his August 23 arrest, they have argued.The Congress MLA was remanded in judicial custody after his ED remand ended on September 8.A petition filed by Puppy’s wife R D Chaitra against his arrest is being heard by the high court, and the next date of hearing is September 17. He is the only accused arrested in the PMLA case so far.