A Bradford charity is being investigated for allegedly bankrolling Kashmiri guerrilla fighters with huge amounts of cash collected for relief projects.
The Ummah Welfare Trust, which is run from small offices in Manningham, appeals for donations for Muslim good causes around the world such as providing fresh water and medicine, sponsoring orphans and building mosques.
But, after growing concern about its activities, the Charity Commission has frozen its bank accounts and tipped off detectives who have arrested six men linked to the group.
The commission started an inquiry after becoming concerned that money was not actually reaching the projects the charity claims to support.
It is understood that one of the watchdog's inquiries is that cash had instead been directed to armed Kashmiri guerrillas who are in a bitter fight to wrestle parts of the disputed province, which lies between India and Pakistan, from Indian control.
A commission spokesman confirmed it is investigating the group - also known as the Amanat Charity Trust - and said it was "looking at the ways in which the charity's funds have been applied".
He added: "The Commission made a formal complaint to the police - we have a duty to report to the police instances when we consider crimes may have been committed."
It is believed Special Branch officers were originally called in to investigate the claims but that the inquiry has since been passed to West Yorkshire Police's fraud squad.
While senior officers refused to release precise details, they confirmed that six men linked to the charity had been arrested and questioned.
They said it followed allegations of fraud involving a "substantial amount of money".
On its website, the trust states it aims to "respond to the aid of the poor and destitute Muslims across the world".
The website contains a direct appeal for people to donate money and lists a series of welfare activities supported by its own volunteers such as providing fresh water and medicine, reconstructing mosques and sponsoring orphans.
The trust's head office is based in a small property off White Abbey Road, but it also has branches in Bolton and Leicester. It has four directors.
A West Yorkshire Police spokesman said: "Six men have been arrested at a premises in the Manningham area in connection with alleged fraud offences.
"All of them have been released on police bail pending further inquiries."
It is believed that two of those arrested were from Bradford, two were from Oldham and another two from Bolton.
The Charity Commission said the inquiry was opened in December last year when it froze the group's bank accounts because it felt funds were at risk.
It said its aim was not to close charities down but to help introduce measures to ensure money was properly distributed.
While the group's most recent accounts state an annual income of £242,000, it is understood the amount involved in the fraud could total as much as £2 million.
When contacted by the Telegraph & Argus, the charity declined to comment about the investigation.
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