A money laundering case has been filed against Dev Kumar Nepali, mayor of Dhorpatan Municipality in Baglung, for allegedly embezzling cooperative funds amounting to Rs1.58 billion.

Acting on the recommendation of the Department of Money Laundering Investigation, the District Government Attorney’s Office, Baglung, lodged the case at the Baglung District Court on September 8.

The department has demanded imprisonment ranging from two to fifteen years, a fine equal to double the amount embezzled, and the confiscation of 33 land plots, Rs1.2 million in cash, and Rs4 million in cooperative shares registered in Nepali’s name.

According to the charge sheet, Nepali and 14 others, including former cooperative officials, allegedly opened fake accounts in the Image Savings and Credit Cooperative to misappropriate the savings of over 1,543 depositors. The investigation revealed that funds were transferred between artificial accounts and shown as loans to non-existent borrowers to justify withdrawals.

The department concluded that the defendants diverted the cooperative’s money through fake transactions and also evaded tax liabilities. They failed to submit mandatory quarterly reports and annual audits to the regulatory body. The cooperative’s management allegedly disbursed loans without collateral, provided illegal loans to relatives, and used members’ deposits for personal gain.

Nepali’s wife, Chela Nepali, has also been named as a co-defendant, with the department seeking confiscation of 17 land plots and Rs69.8 million in her name, along with prison terms and fines. Other defendants include cooperative officials and staff members such as Dor Bahadur Pariyar, Sunil Nepali, Laxmi Sen Sunar, Chitra Bahadur Bhandari, Rupa BK, Jhag Bahadur Shahi, Shakti Kisan, Lal Mati Roka, and Anita Budhamagar.

Earlier, Nepali was arrested in New Delhi in May 2024 following a red notice issued by Interpol in January at the request of Nepal Police. He had been on the run after the cooperative collapse came to light. The Image Cooperative, which Nepali founded and operated in Baglung and Pokhara, defrauded depositors of more than Rs1.5 billion.

Nepali, twice elected mayor from the CPN-UML, is currently in judicial custody in connection with the cooperative fraud case. In June, the Pokhara High Court’s Baglung bench ordered that his property not be auctioned immediately, directing the National Cooperative Bank to halt the sale process.

Victims of the cooperative scam have been protesting in Baglung, demanding recovery of their savings and accountability from the bank and authorities.