Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Politics / Policy/  Hawala cash funded gold smuggling: ED
BackBack

Hawala cash funded gold smuggling: ED

Investigations by the ED have found that about Rs1,000-1,500 crore was used to fund smuggling of gold

During primary investigations, ED had found that using illegal channels, `700 crore was transferred out of India. Further probe showed the racket runs up to about `5,000 crore. Photo: Pradeep Gaur/MintPremium
During primary investigations, ED had found that using illegal channels, `700 crore was transferred out of India. Further probe showed the racket runs up to about `5,000 crore. Photo: Pradeep Gaur/Mint

Ahmedabad: The initial contours of what is turning out to be the biggest hawala scam in the country have started emerging.

Investigations by the Enforcement Directorate (ED) have found that about 1,000-1,500 crore was used to fund smuggling of gold, a senior ED official in Ahmedabad said.

The details came to light when ED filed its first charge-sheet on Friday in the 5,395 crore hawala scam. In the charge-sheet filed in a special court, ED named 79 entities and individuals as suspects in the case.

Hawala is an informal and illegal money transfer service used to fund smuggling and other rackets. In this case, the hawala money was routed through different channels in a period of three months between December 2013 and February 2014 to Singapore and Dubai, the ED official cited above said on condition of anonymity.

Earlier this week, Madanlal Jain, a co-accused in the racket, was arrested by the Detection of Crime Branch of the city police from Mumbai, in connection with a forgery case registered in April 2014.

The hawala racket was busted in March by ED. Surat-based Afroz Fatta is the key accused; he was arrested by ED in May for allegedly running the entire hawala network in association with Jain. “This is for the first time that such a big hawala scam involving thousands of crores of rupees has come to fore," the official said.

During primary investigations, ED had found that using illegal channels, 700 crore was transferred out of India. Further probe showed the racket runs up to about 5,000 crore.

Funds were transferred to firms based in Hong Kong and Dubai from the personal accounts of Fatta and his brother, according to ED. They used fake bills of entry, showing diamond imports from various parts of the world.

A bill of entry is a declaration by an importer (or exporter) of the exact nature, precise quantity and value of goods that have landed or are being shipped out. It is prepared by a customs clerk or broker.

“The duo was producing fake bills of entry in the banks in India to show they are importing diamonds from various countries. Based on the fake bills of entry, banks used to transfer the amount to overseas bank," the ED official said.

A first information report (FIR) in the matter was registered by ICICI Bank Ltd in March with Surat police when it found fake bills of entry in Surat from where the money had been transferred.

Fatta was found to be running a series of companies. As much as 1,351 crore was sent through Surat-based RA Distributors to Hong Kong.

Fatta had approached the Gujarat high court to quash the case registered against him. However, earlier in the month, the court denied him any relief.

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Politics News and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
More Less
Published: 19 Jul 2014, 12:02 AM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App