Enforcement Directorate probing over 3,700 money laundering, FEMA cases post note ban

NEW DELHI: The ED is investigating over 3,700 cases of money laundering and hawala transactions, involving tainted assets worth Rs 9,935 crore, as part of its action against black money generated post demonetisation, an official report on Thursday said.

The central probe agency also carried out a “risk assessment” of these cases, registered post the note ban on November 8 last year, and found that a majority of (43 percent) the financial crimes were carried out by perpetrating bank frauds and cheating financial institutions through a maze of shell firms.

The other category of post-note ban financial crimes being probed by the Enforcement Directorate (ED) includes cases of corruption (31 percent), drugs and narcotics trade (6.5 percent), arms and explosives (4.5 percent) and others (8.5 percent).

“The head of this demon (of 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,” the report said.

ED Director Karnal Singh said that the agency was “committed to work against the menace of black money and corruption and to bring professionalism in its working”.

The agency had registered and was probing a total of 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 has conducted 620 searches since November 8 last year to September.

The total value of assets and forex violation amount involved in these cases stands at Rs 9,935 crore with the agency attaching assets worth Rs 5,335 crore under the Prevention of Money Laundering Act (PMLA) and issuing notices under the FEMA involving an amount of Rs 4,600 crore, the report said.

The ED study also found that financial institutions like banks were the most “vulnerable” to money laundering crimes at 48 percent followed by real estate at 35 percent, precious metals like gold investments at 7 percent and the rest 10 percent in other sectors.

The agency, that enforces the PMLA and the Foreign Exchange Management Act (FEMA) in the country, also arrested 54 people post demonetisation as part of these investigations.