ED arrests two in ₹8K cr money laundering racket

NEW DELHI: Cracking down on shell company operations, the ED has arrested two Delhibased businessman in connection with its probe in a Rs 8,000 crore money laundering and black money racket.

The agency said it has arrested Surendra Kumar Jain and Virendra Jain on Monday. They were produced in a court which has sent them to ten days custody.

At least 90 shell firms are under the scanner of the agency. It has identified 26 of them for allegedly laundering about Rs 62.20 crore funds.

The case emerged after the Enforcement Directorate filed a criminal complaint last month under the Prevention of Money Laundering Act (PMLA) based on a charge sheet filed by the Serious Fraud Investigation Office against certain individuals and firms “for providing accommodation entries by accepting funds from their beneficiaries through mediators and converting the same into share premium transactions in the beneficiary company”.

The ED had also recently attached assets worth Rs 64.70 crore of a firm based here and this investment, it said, is “managed by” Radisson Blu, a luxury hotel in the national capital.

It suspects the entire racket to be worth about Rs 8,000 crore of slush funds and has detected about half of it as per its latest probe.

“The modus operandi of Jain brothers was to launder the unaccounted money through the process of placement of funds, layering of transactions and the final integration of laundering money into the banking channel camouflaged as legitimate share premium transactions.

“Funds were brought in by the mediators on behalf of the beneficiaries through the mediators. Jain Brothers were providing accommodation entries by accepting funds from their beneficiaries through mediators and converting the same into share premium transactions in the beneficiary company. In this process Jain Brothers earned money as a certain percentage of the unaccounted money converted into share premium,” the ED said in a statement.