ED crackdown on money laundering

The Enforcement Directorate (ED) has launched over 400 inquiries and registered 22 cases of money laundering against bank officials, businessmen and middlemen in connection with the allegations of illegal exchange of demonetised notes.

The latest case under the Prevention of Money Laundering Act has been registered against Kishorebhai Bhajiawala, his eight family members, and Pankaj Bhatt, Senior Manager of Surat Peoples Cooperative Bank, based on an FIR lodged by the Central Bureau of Investigation about a week ago. The family is primarily into money-lending business.

I-T Dept. complaint

According to the Income-Tax Department, on whose complaint the CBI registered a case, the total seizure from the Bhajiawalas stands at Rs. 1.02 crore in new notes. An initial search on the residence of the accused had led to the unearthing of Rs. 14.67 lakh in cash, including new notes, from his shop.

Benami lockers

Further investigations revealed that another accused, Jignesh Bhajiawala, was operating several “benami” lockers in the cooperative bank. The investigators seized Rs. 97.84 lakh in new notes from one such locker.

The agency found that the accused had used identification documents of 212 people to get the old notes exchanged between November 12 and 14.

Officials of other banks are also under the scanner on suspicion that they helped the accused convert old notes.

Among the significant cases is also the one involving a Kolkata-based businessman, Paras Mal Lodha, who is suspected to have recycled at least Rs. 25 crore of old notes.

The agency arrested him from Mumbai in connection with the seizure of huge sums of cash from sand-mining baron J. Sekhar Reddy in Chennai and Delhi-based lawyer Rohit Tandon.

Premises searched

While more arrests in the case are likely soon, the ED on Tuesday conducted searches on two Kolkata premises of Mr. Lodha.

Some bank officials are also under the scanner for their alleged role in exchanging the demonetised currency.

Besides, the directorate has been investigating the suspected role of several jewellers in converting cash to bullion. The agency has registered at least two cases involving use of bank accounts opened in the name of shell companies to deposit cash.

About 100 shell companies are currently under investigation.

Post-demonetisation, the ED has conducted raids against suspect foreign exchange operators and is learnt to have launched over 150 inquiries under the Foreign Exchange Management Act.

Verification exercises are also being conducted in banks on the basis of the inputs shared by the Financial Investigation Unit.

Cases filed against bank officials, businessmen and middlemen for illegal exchange of old notes