The Enforcement Directorate (ED) on Tuesday raided 14 locations across Chandigarh, Mohali and Panchkula in connection with its money-laundering probe into the IDFC First Bank and AU Small Finance Bank scam involving the alleged embezzlement of Rs 645 crore from the accounts of the Haryana Government and the Chandigarh Administration.The searches covered several jewellers, including Malik Jewellers, KLG Jewels and its associate entities, MB Gold Traders, Sham Jewellers and Jattvibeder Jewellers. Gourav Kansal, who allegedly acted as a middleman in routing and layering the proceeds of crime, was also targeted.The ED said the searches “resulted in the recovery of further evidence relating to the routing, layering, concealment and projection of proceeds of crime through various entities and bank accounts”.The central agency launched its investigation under the Prevention of Money Laundering Act (PMLA) on the basis of an FIR registered by the Haryana Vigilance and Anti-Corruption Bureau in February 2026. The FIR pertained to discrepancies in the balance of bank accounts maintained by the Development and Panchayats Department with IDFC First Bank and AU Small Finance Bank. Subsequent investigations revealed that seven more departments were affected, with alleged embezzlement from a total of 12 government bank accounts.As per the modus operandi, employees at IDFC First Bank and AU Small Finance Bank allegedly colluded with Haryana IAS officers and other officials to open bank accounts at specific branches. The public funds were then transferred to shell entities, floated by accused bankers. Subsequently, funds from the shell entities were transferred to jewellers and real estate businesses. In the majority of cases, cash was received in lieu of funds transferred through banking channels.The ED investigation revealed that M/s Jattvibeder Jewellers received approximately Rs 3.15 crore in its bank account from M/s Capco Fintech Services, a shell firm. The agency claimed that Mahender Khurana, a partner of Jattvibeder Jewellers, “admitted that upon receipt of credit from M/s Capco Fintech Services, the corresponding cash amount, after deducting the agreed commission, was handed to the accused by his employees”.Similarly, MB Gold Traders allegedly received Rs 1 crore from M/s Capco Fintech. Manoj Gunwant Bhosle, proprietor of MB Gold Traders, told the ED that after deducting the commission, the cash amount was handed over to the accused.The ED said that large amount of cash was generated through various jewellers and the same was distributed to the accused, including IAS officers. The transactions with jewellers were allegedly carried out to conceal and project the proceeds of crime as legitimate funds, the agency said.The ED has so far attached, seized and frozen movable and immovable assets amounting to Rs 211 crore. It has filed a prosecution complaint against 14 persons before the Special Court (PMLA), Panchkula.The case is also being probed by the CBI, which has filed third chargesheet (dated September 2) before the Special Court in Panchkula, naming five Haryana IAS officers, Mohd Shayin, Vineet Garg, Pankaj Agarwal, RK Singh and Saket Kumar, and a retired IAS officer, Pardeep Kumar.