ED to use diplomatic channels to trace foreign recipients in ₹10,000 cr money laundering case

MUMBAI: The Mumbai unit of the Enforcement Directorate (ED) will use legal and diplomatic channels to trace the end recipients in its money-laundering case related to a network that is accused of orchestrating foreign remittances worth over ₹10,000 crore in an illegal manner.

The remittances were sent allegedly to entities located in Hong Kong, Thailand and Singapore, whose ownership details are required in the agency’s probe to establish the identities of the end recipients of the illegal fund transfers and the origin of such funds, agency sources said.

The network of accused persons and 110-odd entities controlled by it, including shell firms and private limited firms, had allegedly sent remittances abroad illegally camouflaged as payments towards freight charges, and such transactions involved a web of bank accounts opened in the name of shell entities, ED sources said.

ED’s probe has revealed the role of several chartered accountants, who are accused of aiding the accused in the case in incorporation of companies, and with the regulatory compliances, including those related to filings at the Registrar of Companies, among others.

The ED initiated its investigation based on a case registered by the Thane police against the accused persons. It carried out searches recently at 11 locations in Mumbai, Thane and Varanasi, Uttar Pradesh and seized movable assets in the form of cash and jewellery worth ₹1 crore. The agency also seized purported incriminating documents related to immovable property transactions and digital devices.

ED’s probe has so far revealed that the accused persons had allegedly set up 98 dummy partnership firms, 12 private limited companies and opened 269 bank accounts in their names to execute such illicit financial transactions through them. The search operations unveiled a network of RTGS (Real Time Gross Settlement) entry operators who allegedly used to arrange the RTGS entries in bank account of partnership firms. This was done through layering of bank account of such shell entities to mask the funds’ origin.

Subsequently, the funds were allegedly finally placed in the bank accounts of 12 private limited companies that were purportedly in the business of freight and logistics and, thereafter, the remittances were sent abroad in the garb of freight charges.