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The Enforcement Directorate (ED) has arrested real estate developer Jaypee Infratech's Managing Director, Manoj Gaur, under the Prevention of Money Laundering Act (PMLA), sources told Zee Business. The matter relates to alleged cheating with homebuyers and money laundering. The country's central financial crime-fighting agency, which had been proving the case for a long time, is investigating allegations that the company defrauded homebuyers on a large scale.

The ED questioned Gaur several times before taking him into custody, according to the sources.

The agency has already said that the probe revealed large-scale financial irregularities that could impact thousands of homebuyers.

The ED traced the money trail after several potential buyers complained that their funds were diverted to other companies or projects.

As per the complaints, senior Jaypee Infratech officials had allegedly collected large amounts of money from the public for several projects but then failed to complete them on time.

According to investigators, some of the funds collected by the company were diverted irregularly.

The ED also suspects that the money -- meant for project construction -- was routed through shell companies, laundered to appear legitimate, and then spent improperly. The funds collected from homebuyers and investors were misused and diverted, according to officials.

In May, the agency conducted a major operation as part of its investigation into the alleged fraud, estimated to be worth Rs 12,000 crore. Those raids, targeting Jaypee Infratech and Jaypee Associates among several major real estate groups, spanned 15 locations across the National Capital Region and Mumbai.

Offices as well as properties linked to the entities were part of the investigation.