In a unique case of trade-based money laundering, the Enforcement Directorate (ED) has unearthed an organised syndicate that allegedly managed a one-stop shop for undervalued imports from China for a large number of domestic traders, people familiar with the development said, adding that it has identified illegal remittances of over ₹4,800 crore so far.
The agency arrested two brothers in the alleged syndicate – Mayank Dang and Tushar Dang – associated with a company, Imports From China or IFC, headquartered in Delhi, on Tuesday under the Prevention of Money Laundering Act (PMLA).
The alleged irregularities are related to illegal remittances of foreign remittances worth ₹4,817 crore against bogus and forged invoices for making compensatory payments for under invoiced imports made from China and Hong Kong, the agency said in a statement on Wednesday.
“The ED investigation revealed that the Dang brothers had made a well-organised syndicate comprising a big pool of Indian importers and traders, cash handlers, international hawala agents, local angandiya firms (traditional courier community that facilitated legal transfer of funds), numerous Chinese manufacturers and suppliers and a dedicated chain of warehouses in several major Chinese cities,” said the agency.
It added that the Dang family also operates and controls several foreign entities in collusion and collaboration with a key Chinese member of the syndicate, who is known as Mr King. Mr King, the agency claimed, “after procuring goods from numerous Chinese manufacturers and suppliers and accumulating the same in various godowns and warehouses, export them to the firms controlled and owned by Dang family”.
“The ED investigation has revealed that the goods imported by Dang brothers are highly under invoiced and the compensatory payments were remitted abroad through Manideep Mago and Sanjay Sethi (both arrested in June this year). The remittances made by Manideep Mago and Sanjay Sethi were made against bogus invoices raised for online lease of servers for crypto mining, education softwares, lease of bare metal servers, etc. However, investigation have revealed that no such services were actually provided and the remittances were made to foreign companies controlled by Manideep Mago and his accomplices, from where the payments were made to Chinese Companies engaged in export of various products to India,” the agency’s statement added.
The offices and residences of the Dang brothers as well as their clients, according to ED, “were a regular pick-up point of cash by employees of accused Manideep Mago and Sanjay Sethi”.
“This cash was layered through various bank accounts operated by the accused persons before being remitted abroad to make payments to Chinese exporters,” agency said.
IFC claims on its website that it is the only professional group of companies that can be import export agents from China to India imports for full or loose container cargo load. It says that IFC owns offices , warehouses and over 100 English and Chinese speaking translators in Hong Kong, Guangzhou, Foshan, Shunde, Yiwu and several other Chinese cities to help sourcing finding reliable suppliers and inspection, forex payments security and shipping forwarding logistics from all over China with lowest freights.
The under-invoicing done by Dangs, according to a senior officer who asked not to be named, is of around 20-40% and there is an extensive network of cash collection and hawala network in their group.
“We have identified at least 1,126 Indian importers and at least 106 Chinese exporters who were working in this organised syndicate,” he said.
HT reached out to IFC through email and phone but there was no response.
Source: Hindustan Times
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