₹2,400 crore cricket-betting scam: Delhi HC rules ED can attach assets tied to forgery, cheating under PMLA

The Delhi High Court (HC) held on Monday, November 24, that money generated from cricket betting using forgery, cheating and conspiracy can be attached by the Enforcement Directorate (ED) as “proceeds of crime” under Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 (PMLA). The court also noted that the ED can attack property generated from illegal betting even tough cricket betting is not a scheduled offence under PMLA.

The ruling was noted by a Delhi HC bench of Justices Anil Kshetarpal and Harish Vaidyanathan Shankar.

The HC clarified that if someone acquires immovable property through forgery, cheating or criminal conspiracy, and then uses, then uses it for any “downstream activity”, any profit earned from subsequently using that property can be attached as “proceeds of crime” if any such activity is traced to the original tainted property.

“This is because the taint attached to the property at its very inception, originated from a criminal activity relatable to a scheduled offence, persists throughout its subsequent use," the Bar and Bench quoted the court as saying.

It further said, “It is also important to note that, even if a downstream activity, such as conducting betting, is not a scheduled offence, profits generated from such activity remain traceable to the original tainted property, especially when the said downstream activity is a final manifestation of a chain of criminality, intricately interwoven with multiple preceding criminal acts, any profit derived therefrom clearly constituting “proceeds of crime” within the contours of the PMLA.”

“With respect to the application of Section 2(1)(u) of the PMLA, it is pertinent to note that the scope of this provision is wide, encompassing not only immediate profits from a criminal act but also any advantage derived from the utilisation, transfer or subsequent exploitation of property obtained from a scheduled offence.”

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The court was hearing a petition filed by some individuals who had challenged the ED giving provisional attachment orders (POA). The case stems from an ED probe into a major hawala network linked to an international betting syndicate that was allegedly being run through the UK-based platform Betfair.com.

The court also ruled that the “PAO also indicates the existence of a clear nexus between the material collected and the inference drawn.”

In May, the agency had raided residence of the one of the accused acting as a conduit, accused of procuring and distributing Super Master IDs — that allowed the creation of numerous betting accounts without any KYC checks. The accused allegedly procured them at ₹2.4 crore each.

According to the B&B, the money to purchase the Master IDs were illegally remitted abroad, enabling betting networks across India, Dubai, Pakistan and other countries.

The ED has alleged that the group generated ₹2,400 crore in betting turnover. The money was made between December 2014 and March 2015. The ED attached movable and immovable properties believed to be proceeds of crime.

It was then petitions were filed, challenging the attachment of properties. The court rejected the petitions and upheld the attachment of properties by the ED.