The Enforcement Directorate has arrested two Chinese nationals on money-laundering charge in connection with a ‘hawala’ network involving several shell companies. They are in the agency’s custody.
The accused have been identified as Luo Sang and Carter Lee. Sang had come under the Income-Tax department’s scanner in August last year for running a ‘hawala’ racket using shell companies. He allegedly ran the racket and Lee, a pass-out from the Delhi University who also knows Hindi and English, worked as a translator for him.
Based on the findings, the ED also launched investigation under the Prevention of Money Laundering Act.
The I-T department had detected the racket allegedly involving Chinese companies that used shell entities for ‘hawala’ operations in India. Searches were then carried out in the premises of the suspects in Delhi, Gurugram and Ghaziabad.
The department zeroed in on Sang, who had been living under a pseudonym, Charlie Peng. The accused held a fraudulently obtained Indian passport purportedly issued from Manipur.
According to the agency, Sang used about 10 bank accounts opened in fictitious names to route funds. He represented several Chinese companies in India for ‘hawala’ operations.
“Based on the credible information that some Chinese individuals and their Indian associates were involved in money laundering and ‘hawala’ transactions through a series of shell entities, a search action was mounted in various premises of these Chinese entities, their close confederates and a couple of bank employees,” the department had said.
Initial probe revealed that at the instance of the Chinese individuals, over 40 bank accounts were set up for various dummy entities, entering into credits of more than ₹1,000 crore over a period of time.
“A subsidiary of Chinese company and its related concerns have taken over ₹100 crore bogus advances from shell entities for opening businesses of retail showrooms in India,” the department had said, adding that the role of some bank officials and chartered accountants was also being investigated.
Seng, who had been using forged identification papers, was first arrested by the Delhi Police Special Cell in September 2018. He was then operating from Gurugram.
