Noida gang used PAN card data of 635,000 people in multi-crore racket, busted

An official from the state GST department said that it could be estimated at more than ₹10,000 crore

The Gautam Budh Nagar police have busted a gang of eight people who were unscrupulously misusing permanent account number (PAN) cards of 635,000 people for over five years and created 2,660 shell companies to evade Goods and Services Tax (GST) worth multiple crores, deputy commissioner of police (Noida) Harish Chander said on Thursday.

The suspects have been identified as Yasin Sheikh, 38, of Mumbai, Akash Saini, 21, of Sahibabad, Atul Sengar, 23, of Hathras, Avni, 25, of Noida, Deepak Murjani, 48, his wife Vinita, 45, Vishal, 20, and Rajeev, 38, (all Delhi). They were apprehended at their office in Madhu Vihar, Delhi. (Sunil Ghosh/HT Photo)

While authorities are yet to ascertain the total amount of tax evasion, an official from the state GST department, who was present at a press conference held by the Gautam Budh Nagar police on Thursday, said that it could be estimated at more than ₹10,000 crore.

“All of the evidence and documents discovered by the police during their investigation into the scam have been verified and analysed by us. According to our estimates, the suspects have defrauded the GST department of more than ₹10,000 crore,” said the official, who requested anonymity because he was not authorised to speak to the media.

The official said the suspects obtained a refund of input credit tax from the government using fictitious companies, causing multi-crore loss to the public exchequer.

The case came to light after a Noida resident and editor of a media firm located in Sector 16, filed a complaint at the Sector 20 police station on May 10 about identity fraud on his PAN card.

Equipment used by the suspects to run their operations has been seized by the police. (Sunil Ghosh/HT Photo)

“The complainant discovered that his PAN card number had been used to register two bogus businesses, one in Ludhiana, Punjab, and the other in Solapur, Maharashtra. Following this, a first information report was registered under sections of the Indian Penal Code dealing with forgery and cheating, and an investigation was launched,” said DCP Chander.

The police were led to a gang that had been active for five years and had the permanent account number card details of over 635,000 people after an investigation.

“The gang has been active for the last five years, and at least PAN card details of 635,000 people have been recovered from them. The suspects used these PAN card details to set up fake businesses and register them with GST numbers. We found 2,660 such fake companies that were registered using false permanent account number card information. These bogus companies were then used to generate e-way bills (GST related challans for transporting consignments) worth more than ₹2- ₹3 crore per month on each company,” said Laxmi Singh, commissioner of police in Gautam Budh Nagar.

“These companies were registered in various cities across the country under various names,” Singh added. According to the police commissioner, the GST department and other agencies have been notified to investigate the matter.

According to police officers associated with the case, seven suspects who purchased the companies from the arrested suspects have been identified and are being tracked down.

“Five of the suspects are certified chartered accountants. We are in contact with GST officials, who have expressed concern that some businessmen may have purchased these fake companies in order to obtain GST input credit from the government and evade tax,” said Rajneesh Verma, assistant commissioner of police-1, Noida.

The suspects have been identified as Yasin Sheikh, 38, of Mumbai, Akash Saini, 21, of Sahibabad, Atul Sengar, 23, of Hathras, Avni, 25, of Noida, Deepak Murjani, 48, his wife Vinita, 45, Vishal, 20, and Rajeev, 38, (all Delhi). They were apprehended at their office in Madhu Vihar, Delhi.

Verma explained the suspects first established fake companies by illegally purchasing personal data, including names, fathers’ names, dates of birth, and personal account numbers, from a service provider.

“The suspects used this data to fill out bogus rent agreement and electricity bill forms found online, or to edit existing bills with the data,” he explained, adding, “Then they looked for unemployed people living in slums or temporary settlements and paid them between ₹1,000 and ₹1,500 for their Aadhaar cards. Finally, the suspects changed their phone numbers on the cards.”

The suspects formed a shell company using these documents, and filed GST returns for these shell companies, said investigators familiar with the matter. The suspects then sold these shell companies for ₹80,000- ₹90,000 in cash, said investigators.

“After that, those who bought the fake companies used to offer attractive offers of GST input credit refund and low-cost conversion of black money to white money to their businessmen clients all over the country,” Verma explained.

According to the ACP, the suspects used to show fake companies’ GST tax to convert their clients’ black money.

“The suspects used to convert black money into white money in this manner. At the same time, they were reclaiming lakhs of rupees in input credit from the government in various ways. The gang’s chartered accountants also sold these companies’ Goods and Services Tax bills to their clients. As a result, the suspects have generated fake bills worth ₹2-3 crore in a month using only one Goods and Services Tax number,” said the ACP.

“As a result, the government has been defrauded in Goods and Services Tax fraud and tax evasion in the same manner by this gang,” DCP Chander added.

The suspects were sent to judicial custody on Thursday.