3,700 cases involving ₹9,900cr under ED gaze

NEW DELHI: The Enforcement Directorate (ED) has reported that it registered over 3,700 cases of money laundering and forex violations and issued close to 600 showcause notices in the last one year after demonetisation in November 2016.

In a report, the directorate said this heightened crackdown through 620 search operations across the country led to the discovery of illegal assets worth more than ₹9,900 crore. This data for the period between November 2016 and September 2017 also showed that 54 people were arrested for money laundering.

The report detailed that 3,567 cases were registered under FEMA violations involving ₹4,600 crore and 191 cases were registered under PMLA (Prevention of Money Laundering Act).

Assets worth ₹5,335 crore were attached under PMLA. The report also showed the scurry to convert black money into white and bring it into the financial system, right after note ban.

In the report, ED observes that financial institutions are most vulnerable to money laundering, followed by real estate.

The report shows how banks are cheated or bank officials are bribed to launder money. ED listed six most popular methods of this conversion: bribing bank officials, creation of shell companies, buying gold, over-invoicing imports, hawala and investment in real estate.

“In most cases…use of shell companies was an important factor,” said the report.

In fact, in 24 hours on April 1, 2017, ED searched 134 locations in 16 states involving more than 1,000 shell companies, the report said.

In a risk assessment exercise, ED found that 43% of money laundered was through financial institutions by cheating them using shell companies and real estate.