ED busted Rs.10,000 Crore Money Laundering Network Involving CAs and Hawala Dealers

The ED has unearthed a network of CAs and hawala operators who have transferred more than Rs.10,000 crore of black money out of the country in recent years. A search on January 2 in Thane, Mumbai, and Varanasi yielded digital and other documents revealing the accused’s method of operation.

According to the agency, the main accused, Jitendra Pandey, opened over 98 shell businesses and 269 bank accounts to launder “proceeds of crime” to Singapore, Hong Kong, and Thailand.

“The investigation further revealed a network of RTGS entry operators who used to arrange entries in accounts of partnership firms following layering the transactions through several bank accounts of shell companies in order to cover up the origin of the funds,” according to the ED.

Following circular transactions in multiple bank accounts, the accused transferred funds to the accounts of 12 private limited companies before making foreign remittances. The funds were sent out of the nation as payment for the import of goods from China. The shell businesses claimed to be in the “freight and logistics” business and sent large sums of funds abroad under the notion of freight charges.

“Several CAs played a role in helping the accused in formation of the companies and with the regulatory compliances, including ROC filing etc., has also emerged,” the department reported.

The ED launched an investigation based on a FIR filed by Thane police against Pandey and others. “They are accused of making remittances over Rs.10,000 crore to entities in Hong Kong, Singapore and Thailand in the guise of freight charges through a network of bank accounts opened in the name of shell entities,” according to the ED.