ED Raids 16 Locations in Vasai-Virar Over 32 Crore Illegal Construction Scam

Mumbai, July 2, 2025:

The Enforcement Directorate (ED) on Tuesday intensified its crackdown on the massive illegal construction racket in Vasai-Virar by conducting raids at 16 locations, including the residences and offices of architects, municipal engineers, and other suspects. The operation is part of an ongoing investigation into the unauthorized construction of 41 buildings in Vasai East—structures that have already displaced thousands of families and exposed a deep web of corruption involving civic officials and real estate developers.

The ED's action comes just weeks after it seized over ₹32 crore worth of gold and cash from the residence of Y.S. Reddy, the former Deputy Director of Town Planning of the Vasai Virar City Municipal Corporation (VVCMC), on May 14. The shocking discovery has since triggered a string of investigations into how such large sums were amassed and where they originated from.

Architects and Officials Under the Scanner
 

According to sources, Tuesday’s searches targeted individuals believed to be key players in facilitating illegal permissions for the construction of the 41 now-demolished buildings on a 60-acre plot in Vasai East. The plot had originally been reserved for a sewage treatment plant and dumping ground under the civic development plan.

The ED suspects that several transactions related to building approvals were carried out not in conventional cash but in gold, to avoid easy detection and maintain secrecy. Officials say the architects acted as intermediaries, coordinating between developers and civic officers to bypass legal procedures using forged documents and manipulated land use records.

"Following the earlier action against Reddy, several architects had fled abroad. They assumed the heat had died down, but returned recently—only to find the probe escalating," said an ED official involved in the operation.

From Town Planning to Land Scams
 

The scandal came to light after a complaint was filed by former corporator Dhananjay Gawade, who alleged that Reddy and other civic officials colluded with developers to illegally construct on government-reserved land. The alleged fraud includes the use of fake building approvals, forged land documents, and illegal land classification changes to mislead authorities and fast-track constructions.

Reddy, who has since been suspended by the VVCMC, will now face both criminal proceedings and a departmental inquiry into his role. According to preliminary estimates, over 2,500 families were rendered homeless when the VVCMC, in a dramatic move earlier this year, demolished all 41 unauthorized buildings.

Political Links and Bigger Fish

The ED’s probe has also reached political corridors. Sources confirm that former corporator Sitaram Gupta has already been interrogated. Gupta, who has held multiple local posts since 2009, is allegedly linked to a larger network of illegal constructions across Vasai-Virar. Investigators believe he used his influence to protect developers and manipulate zoning regulations to facilitate mass-scale illegal developments.

“Gupta’s role in this case is significant. He is believed to have been a central figure in helping legitimise the otherwise illegal operations through his network in the civic body,” an ED source confirmed.

What This Means for Vasai-Virar
 

The Vasai-Virar region, once a fast-developing urban fringe of Mumbai, has now become a cautionary tale of unchecked urbanization. The construction scam has exposed serious lapses in governance, with allegations pointing to a nexus between civic officers, political figures, architects, and builders.

Legal experts say this case could set a major precedent for urban land use cases across India. “If the ED succeeds in proving a money laundering case, it will change the way real estate scams are investigated going forward,” said advocate Meera Desai, a lawyer specializing in urban development law.

Public Outcry and Demand for Justice

The mass demolition in Vasai East earlier this year had triggered public outrage, with hundreds of affected families staging protests and demanding compensation. While the state government had announced temporary rehabilitation for a few, many families are still struggling to find shelter.

“The system let us down. We bought flats with our life savings and had documents that looked legitimate. No one warned us the buildings were illegal,” said Ramesh Patil, a former resident of one of the demolished towers.

What’s Next in the Probe

The ED is expected to summon more suspects in the coming days, including real estate developers, legal consultants, and middlemen. Digital and financial records seized during Tuesday’s raids are being examined to trace the full scale of money laundering and identify all those involved.

Officials say they are also exploring if similar frauds have occurred in other fast-developing regions of Palghar, Mira-Bhayandar, and Nalasopara, which have seen a real estate boom in recent years.

Conclusion
 

The Vasai building scam has laid bare the vulnerabilities of civic planning in India’s satellite cities. As the ED widens its probe, the case is fast becoming a symbol of systemic corruption, where public land, instead of serving the people, became a tool for profit.

If prosecuted successfully, it could not only bring justice to thousands of displaced citizens but also serve as a powerful deterrent to those who misuse their authority for personal gain.