MUMBAI, Aug. 14 -- The Enforcement Directorate (ED) on Wednesday arrested former Vasai-Virar City Municipal Corporation (VVCMC) commissioner Anil Pawar and former deputy director of the VVCMC town-planning department, YS Reddy, as part of its money laundering investigation into the construction of 41 illegal buildings in Vasai East, which were demolished as per court orders in February this year. Both Pawar and Reddy had been questioned by the agency earlier about alleged irregularities in construction of the 41 illegal buildings and the lack of any action against them. The officials had been interrogated after raids on their residential premises, during which unaccounted cash was found at Reddy's Hyderabad home and Rs.1.33 crore was recovered from the house of one of Pawar's aides. Apart from Pawar and Reddy, the ED's Mumbai unit on Wednesday also arrested former VVCMC corporator Sitaram Gupta and a co-accused identified as Arun Gupta, for their alleged involvement in the case, sources in the investigating agency told HT. According to the ED, large-scale illegal construction within VVCMC limits began in 2009, with Sitaram and Arun Gupta and a few others being the key perpetrators. "During the course of investigation, we found that numerous unauthorised, illegal buildings were constructed with the close connivance of various VVMC officials," an ED officer told HT on condition of anonymity. The probe revealed that Pawar, an Indian Administrative Service (IAS) officer, had formed a cartel comprising civic officials, architects, chartered accountants and intermediaries which set in motion large-scale illegal construction. After he became the VVCMC commissioner, the "commission" or bribe paid by those seeking approval for building plans was fixed at Rs.20-25 per square feet for Pawar, and Rs.10 per square feet for Reddy and other junior officers, the ED found. The IAS officer's "crucial role" in the cartel was evidenced in documents and digital devices seized by the ED during searches conducted on July 29 at 12 locations in Mumbai, Pune and Nashik, including the homes of the officer and his relatives and associates, with one search allegedly yielding Rs.1.33 crore in cash, said sources. The searches were based on revelations by several suspects and witnesses questioned earlier by the agency and chats found on their mobile phones. Documents seized during the searches indicated Pawar had created a number of shell entities in the names of his family members, relatives and associates to launder collected bribe amounts, said ED sources. "The formation of shell entities coincided with his posting as VVCMC commissioner. The entities are primarily engaged in construction and redevelopment of residential towers and warehouses," said the ED officer quoted earlier. Scrutiny of the devices and documents seized during the July 29 searches also revealed that a large amount of black money had been flowing into the VVCMC for approval of construction plans, the officer added. Earlier, on May 14-15, the ED had conducted searches at 13 locations including the Hyderabad residence YS Reddy. He was later suspended by the VVCMC and ordered to face a departmental probe as his alleged actions violated the Maharashtra Civil Services (conduct) rules....