The funds were earmarked for a 1996-initiated project for the building of over 11,000 units of subsidized housing to benefit the area's rural poor population, and to reduce the prevalence of slums.
[2][3] The scam was discovered and exposed by then Municipal commissioner of Jalgaon, Praveen Gedam, who filed a police complaint against Khandesh Builders with respect to the irregularities he saw after that company was awarded the housing contract.
Many of the poor falling within the project's scope and criteria for benefits, were noted to reside in rudimentary structures, made of clay or grass, often without proper sanitation.
They discovered that Suresh Jain, Gulabrao Devkar, and other key personnel at Khandesh Builders were involved in criminal activities related to the housing project scam, all of whom were ultimately booked on charges.
Its findings included that payments made to Khandesh Builders were improperly diverted to other companies owned and controlled by Suresh Jain and his family.
[4][8] The Jalgaon district court ultimately convicted Gulabrao Devkar and Suresh Jain for their participation in the housing scam, finding that as a result, the public had been bilked of about 110 crore rupees ($14,996,693.80 US as of Feb 2021, as adjust for inflation).
[15] Although the polices investigation team was headed by IPS Officer Ishu Sindhu,[16] three separate commissions were formed to probe into the details of the fraud.
[18][11] As a result of the investigation, prominently, Suresh Jain and Nationalist Congress Party politician and minister of Maharashtra, Gulabrao Devkar were arrested by Jalgaon police.
In late 2019, special judge Srushti Neelkant of the Jalgaon district court in Dhule convicted Jain of the charges, sentenced him to a seven-year prison term, and fined him ₹100 crore (US$12 million).
[19][14][20] Two other individuals, Rajendra Mayur and Jagannath Vani, who were owners of Khandesh Builders, also received seven-year prison terms and ₹40 crore (US$4.6 million) fines.
[17] Indian Police Service officer, Ishu Sindhu, stated that "The conviction in the case is a big success for the efforts of the policemen, who worked relentlessly during the probe and prepared the documents".
[24] As of 2021, Devkar is a member of India's Nationalist Congress Party; has a significant public following and support, despite his conviction in the housing scam,[25][26] and is considered one of the most powerful NCP politician in the North Maharashtra region.
[27] According to investigators into the Jalgaon housing scam, JMC suffered aggregate losses of 150 crore rupees, which it had to repay to HUDCO on defaulting loan terms.