ED cracks down on ₹2,188 crore money laundering case, city builders among accused

A special court in Mumbai has initiated money laundering proceedings against seven individuals, including two city builders, in a case involving alleged illegal foreign remittances of INR2,188.32 crore ($299m). The Enforcement Directorate filed a supplementary charge-sheet in relation to the case, which is based on an FIR registered by the Central Bureau of Investigation in May 2017. The case involves the creation of multiple entities and the use of fake bills of entries for remittances abroad. The accused have been summoned to attend court on 12 December.

MUMBAI: A special Prevention of Money Laundering Act (PMLA) court on Tuesday took cognizance of a supplementary charge-sheet filed by the Enforcement Directorate (ED) and initiated money laundering proceedings against seven individuals, including two city builders – Prakash Jayantilal Mehta, a partner in Kalpavriksha Developers, and Nirmal Lifestyle CMD Dharmesh Jain – and four entities in a case involving alleged illegal foreign remittances of ₹2,188.32 crore.

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“The supplementary prosecution complaint demonstrates the whole process of money laundering by flow of charts which prima facie indicates material stages i.e. generation of POC, its placement, layering and integration amounting to an offence defined under section 3 of the PML Act,” said special judge Sunil U Hake while issuing summons against the 11 accused. The special court has now summoned the accused to attend the court on December 12 to face the charges.

ED’s case is based on an FIR registered by the Central Bureau of Investigation (CBI) on May 13, 2017, against Ramesh Nagrajan, former chief manager of the Crawford Market branch of the Central Bank of India, and four private individuals, including Farooque Shaikh and his brother Hussain.

Investigation conducted by CBI revealed that between 2014 and 2016, the Shaikh brothers had created at least 13 entities and opened several bank accounts using credentials and identity documents of poor and unconnected people. Through these entities, Farooque had remitted US dollars equivalent to around ₹1,464.30 crore to Hong Kong and had received an amount of ₹67 crore towards his commission. During the same period, Hussain also remitted US dollars equivalent to ₹724 crore to Hong Kong and received ₹33.34 crore as his commission.

The probe conducted by ED revealed that the amounts were remitted by the brothers through banking channels using fake bills of entries. In many transactions, the same bill of entry had been used to transmit amounts through different banks. In some cases, the same bill of entry was found to be submitted to the same bank multiple times to illegally remit the amounts abroad.

Based on the findings, ED filed the first charge sheet against six individuals in 2018. During further investigation, the anti-money laundering agency found the involvement of three accomplices of the Shaikh brothers, including the wife of Farooque, and that the proceeds of crime had reached four businessmen, including the two city builders.

The four businessmen include Sanjay Singhania, a director in GLS Electronic Industries Pvt Ltd, Prakash Jayantilal Mehta, a partner of Kalpavruksha Developers, Dharmesh Jain, chairman and managing director of Nirmal Lifestyle Ltd, and Ketan Vira, a director in KP Packaging Ltd. The quartet is accused of entering into dubious transactions with the purported racket and accepting amounts from Shaikh’s either as investments or towards the sale of flats to them.