Bengaluru’s legal corridors echoed with a major development on Monday as the Enforcement Directorate’s Mangalore sub-zonal office lodged a prosecution complaint before a special court under the Prevention of Money Laundering Act (PMLA), 2002. The targets: Bhimashankar Bilgundi and Mallanna S. Maddarki, key figures in an alleged multi-crore stipend scam at Kalburgi’s Mahadevappa Rampure Medical College (MRMC) spanning 2018 to 2024.
The probe kicked off following an FIR by Kalburgi City CEN Crime Police Station, Karnataka, invoking various IPC sections against Dr. S.M. Patil, Subhash, a Canara Bank manager, and others. Initial findings exposed massive irregularities in stipends meant for postgraduate medical students at the college.
According to ED investigations, prime accused Bhimashankar Bilgundi, former chairman of Hyderabad Karnataka Education Society—which runs MRMC—orchestrated the fraud with help from accounts staff and office superintendent Mallanna S. Maddarki. Between 2018 and 2024, around Rs 33.34 crore deposited into PG students’ bank accounts was siphoned off.
The modus operandi was chilling: Students were coerced into signing blank cheques at admission, which were later filled and encashed, depriving them of rightful stipends. ED raids in April and May 2025 across nine locations in Kalburgi yielded incriminating documents and digital evidence.
Proceeding on these leads, the agency attached properties worth Rs 6.72 crore provisionally. These include immovable assets bought by Bilgundi in his sons Rajkumar and Santosh Bilgundi’s names, plus bank accounts and properties of co-accused Maddarki, under attachment orders dated July 18 and September 4, 2025.
As the investigation presses on, ED hints at more revelations ahead, underscoring the depth of corruption in educational institutions. This case serves as a stark reminder of the need for vigilant oversight in public-funded schemes.