In a startling revelation, the enforcement directorate (ED) has told its appellant tribunal in New Delhi that the Rs 200 crore money-laundering scam involving city-based advocate Mukesh Mittal has also caused losses worth several lakhs to various governments - including Chandigarh and Himachal Pradesh - in terms of stamp duty and registration fee, while also evading income tax.
In a reply filed by the ED before the appellate tribunal, Prevention of Money Laundering Act, New Delhi, on November 5, it was pointed out that the proceeds of crime of the scam that involves almost 40 shell companies being run by Mittal and his associates routed “ill gotten” crores through these companies buying properties (including benami) worth at least Rs 500 crore. Sources in the ED said at least 30 persons, including Mittal, are likely to be summoned again following emergence of fresh evidence in the case.
The ED had, following an ECIR registered in May 2013, raided the residences of Mittal and his associates in January this year. “The search resulted in seizure of highly incriminating documents relating to the more than 50 properties movable and immovable, 214 blank signed cheques (by benami account holders), records related to several shell companies (without any business activities and having heavy financial transaction) and properties worth approximately Rs 500 crores were seized, which were believed to be linked with the suspect ‘proceeds of crime’. These are strong evidences of an offence of the money laundering,” states the reply.
“Evasion of taxes by these individuals is a corollary to creating beneficial interests in high value assets at nil or near nil consideration; this is a necessity for these individuals as they do not have any real business or profession wherein they could have high incomes which they are intending to conceal from the taxation perspective,” states the ED.
“Unearned profits, which were the right of the state exchequer, amounting to crores have been siphoned off by the route of misinterpretation of the judgments of the lok adalat that passed judgments and decrees of persons/ people filing a civil suit against their own selves. None of the judgments of the civil court or the lok adalat passed any order on the financial implications of properties being transferred.”
“It is also pertinent to mention here that more than 200 bank accounts were found in the names of individual persons, firms and companies. Also, the modus operandi used was to close one bank account and open a new bank account in another bank frequently to mislead or hide in suspicious transaction of ill-gotten money,” states the reply further.
Interestingly, the ED had traced `29 crore in the bank account of one Lal Chand, Mukesh Mittal’s driver. Lal Chand is one of the directors of the shell company created by Mittal. “The financial statements of these shell companies also establish that these firms have no source of income and no transactional business as per the industrial service code notified by the Central government. The company accounts are only showing borrowing and lending, thereby establishing these as illegal non banking financial companies in complete violation of acts and rules set out by the government and the Reserve Bank of India, and violation of the acceptance of deposit rules under the Companies Act,” adds the reply.