A senior ED official in Delhi told : "The agency has registered a case of money laundering against Prajapati, then Principal Secretary Jiwesh Nandan, Special Secretary Santosh Kumar, then District Magistrates Abhay Kumar Singh and Vivek and unknown others."
The ED said it registered a criminal case on the basis of a CBI FIR registered last month.
The ED had on July 16 questioned Prajapati in Lucknow's King George's Medical College for three hours.
Prajapati, who is in judicial custody in an alleged gang rape case, was recently shifted to hospital after he complained of being unwell.
The ED has questioned Prajapati about his role in giving three sand mining licences to Shiv Singh and Sukhraj in Fatehpur district.
The official said the agency suspects that the money generated from Shiv Singh and Sukhraj was used to buy properties in cities like Lucknow, Rae Bareli and Amethi.
The agency also plans to question Prajapati's sons Anil and Anurag to identify the money trail.
The CBI last month searched Bulandshahr District Magistrate Abhay Kumar Singh's and former Deoria District Magistrate Vivek's premises among others.
Abhay Kumar Singh was earlier the District Magistrate of Fatehpur while Vivek is presently the Director of Training and Employment in Lucknow.
During the searches, the CBI seized Rs 47 lakh in cash from Abhay Kumar Singh's residence while Rs 10 lakh was found from the premises of Devi Sharan Upadhyay, a former Additional District Magistrate of Deoria, now posted as CDO, Azamgarh.
The development can spell trouble for former Chief Minister Akhilesh Yadav since he has been linked to illegal mining.
Abhay Kumar Singh has been under the CBI scanner for alleged irregularities in mining when he was the District Magistrate of Fatehpur when Akhilesh Yadav was the Chief Minister (2012-17). Akhilesh Yadav was also the Mining Minister in 2012-13.
The illegal mining allegedly took place between 2012 and 2016. According to the CBI sources, a total of 22 tenders passed by the Uttar Pradesh government between 2012 and 2016 were being scrutinised.
Of these, 14 were passed when Akhilesh Yadav held the mining portfolio and the rest when Prajapati was the Mining Minister.
In June, the CBI searched Prajapati's three premises in Amethi.
In February, the ED registered a case of money laundering against IAS officers B. Chandrakala and others in illegal sand mining cases on the basis of the CBI FIR.
The CBI registered the FIR after the Allahabad High Court directed it to investigate allegations of illegal mining in Shamli, Hamirpur, Fatehpur, Siddhartha Nagar and Deoria districts.
( With inputs from IANS )