The Enforcement Directorate is reportedly investigating over 3,700 cases of money laundering and hawala transactions, involving tainted assets worth £993.5 million, as part of its drive against black money post-demonetisation. The agency said it carried out a “risk assessment” of these cases, registered after last year's November 8 note ban and found 43 per cent of financial crimes were carried out by perpetrating bank frauds and cheating financial institutions through a maze of shell firms. Another category of post-note ban financial crimes being probed by the ED include cases of corruption (31 per cent), drugs and narcotics trade (6.5 per cent), arms and explosives (4.5 per cent) and others (8.5 per cent).
“The head of this demon (black money) is the money of corruption and illegal wealth acquired through banking frauds. A general review of the cases post-demonetisation show that businesses and professionals have collaborated with each other to use shell companies for converting illegal wealth into legitimate assets,” an ED report said. Agency director Karnal Singh said they were “committed to work against the menace of black money and corruption and to bring professionalism in its working.” The ED has registered and is probing 3,758 cases (3,567 under forex laws and 191 under the anti-money laundering act), issued 777 show cause notices and attachment orders and conducted 620 searches since November 8 last year to September.
The study also found that financial institutions like banks were the most “vulnerable” to money laundering crimes at 48 per cent followed by real estate at 35 per cent, precious metals like gold investments at 7 per cent and the rest 10 per cent in other sectors. The ED also arrested 54 people post-demonetisation as part of these investigations. They found that “proceeds of crime were laundered mainly through financial institutions (like banks) using shell companies and real estate.”
The ED said, “Even in real estate sector, the money for investments has been coming through financial institutions using a maze of shell companies. The shell companies, therefore, are the major modus operandi through which money is laundered.” Official sources said the agency had a number of politicians and bureaucrats under its scanner as part of these investigations.
