Torres fraud: Hawala operator remanded to ED custody

Based on the material submitted by the investigating officer, the special court on Wednesday observed that prima facie, it appeared that Alpesh Khara was involved in handling and layering of the proceeds of crime

MUMBAI: The special court trying the Torres Jewellery case has remanded Alpesh Khara, the hawala operator arrested in connection with the investment scam, to the custody of the Enforcement Directorate (ED) till April 1.

Mumbai, India - Jan. 6, 2025: Torres jewellery showroom in Dadar vandalised after cheating allegations by many investors in pretext of doubling their money, in Mumbai, India, on Monday, January 6, 2025. (Photo by Anshuman Poyrekar/ Hindustan Times) (Hindustan Times)

Based on the material submitted by the investigating officer, the special court on Wednesday observed that prima facie, it appeared that Khara was involved in handling and layering of the proceeds of crime.

The ED told the court, constituted under the Prevention of Money Laundering Act, 2002, that Khara was the owner of angadia or hawala services, and the money was delivered through a code system developed by Platinum Hern Pvt Ltd, the holding company of the Torres brand. This was done by creating a group on Telegram (a software application) called ‘Cash Counter’, through which the cashiers received instructions to deliver the cash.

While recording the statements of the employees, the ED said they received WhatsApp messages from Khara to keep the cash ready, along with a code. Citing an example, they said ‘200 kg 6661’ indicated that the money to be handed over was ₹2 crore and the code was 6661.

According to the employees, Khara acquired crores of rupees in cash from the Dadar showroom, said the ED. Based on evidence found in the mobile phones of the employees, the agency said the cashier handed over the money to one person called ‘Sagar Mehta’ and others based on Khara’s instructions who sent them a secret code. Khara allegedly refused to provide answers and remained non-cooperative during interrogation.

The ED said its investigation showed that Khara had converted the cash into USDT, a crypto currency, and credited the sum into the e-wallet of Olexandar Zapichenko (Alex), named as a wanted accused in the chargesheet filed by the Economic Offences Wing of the Mumbai police. A statement made by Torres CEO, Tausif Riyaz, another accused, allegedly revealed that the cash collected through the business of Platinum Hern was delivered to Khara, who converted it into cryptocurrency.

The ED submitted that Alex was in constant touch with Khara, who after receiving the cryptocurrency would make arrangements to deliver the cash from the showroom to Khara’s office. According to Riyaz, the transactions took place through, ‘Binance’, another software application, said the ED.

The special public prosecutor said that Khara was involved in sophisticated money laundering activities and had acquired and concealed funds through digital channels. The ED sought seven days of custody, while observing that they wanted to unearth the proceeds of crime and the modus operandi, and to investigate the conspiracy carried out by the other accused persons.

Advocate Mahesh Ahire, representing Khara, contended that he was neither an office-bearer nor an employee of Platinum Hern. The defence said he joined the angadia business after the Covid-19 pandemic, and they do not maintain a record of persons who hand over cash and of person who receive it. The advocate claimed there was no case for ED custody as Khara is unaware of the source and the end user.

Special judge AC Daga said that if the ED custody was not granted, it would hamper the investigation and the “complainant will not be in a position to trace out the money generated in the crime, will not be in a position to reach the beneficiaries of proceeds of crime, and will not be in a position to know how the proceeds of crime was converted into cryptocurrency and vice-versa”.

Torres Jewellery, launched in February 2024, was an allegedly elaborate fraud operation in which thousands of small investors were duped of crores of rupees after being lured to invest in various schemes floated by its chain of six stores in Mumbai, Navi Mumbai, Mira Road and Kalyan.

The investors were allegedly lured to invest in schemes that promised unbelievable weekly returns on the purchase of gold, jewellery and moissanite stones. The main accused in the case are alleged to have transferred over ₹200 crore outside India through USDT, a cryptocurrency.