Illegal foreign remittances case: ED arrests aide of international Hawala syndicate active in Delhi

The Enforcement Directorate (ED) has arrested a member of an international Hawala syndicate active in Delhi, under charges of money laundering in an illegal foreign remittances case. The accused, identified as Manideep Mago, was arrested under the Money Laundering Act (PMLA), 2002 as his role was established as a member of an international Hawala syndicate which has been active in Delhi and was collecting cash from exporters and importers; and remitting the same to foreign countries against bogus invoices.

The Delhi Police had earlier also arrested the accused Manideep Mago in the matter. ED initiated an investigation on the basis of source information that a Delhi-based company has sold cryptocurrencies worth more than Rs 1,858 crore on crypto exchanges.

During preliminary investigation, ED said, it was revealed that foreign outward remittances worth more than Rs 3,500 crore have also been made by the company and its related entities. Further, cash deposits of more than Rs 1,300 crore have also been made in the bank accounts of related entities.

Based on the preliminary findings, ED said, a search action under the Foreign Exchange Management Act (FEMA) was conducted by the Directorate. "During search proceedings, it was revealed that an International Hawala syndicate has been active in Delhi and was collecting cash from exporters/ importers; and remitting the same to foreign countries against bogus invoices. As part of this large operation, foreign outward remittances worth more than Rs 3500 Crore have been sent to Canada and Hong Kong against bogus invoices raised for 'online lease of GPU servers for crypto mining', educational software and lease of Bare Metal servers," said the agency.

It is revealed that the members of the syndicate incorporated companies in Hong Kong and Canada, for facilitating International Hawala, it said "The syndicate has invested heavily in illegal crypto mining and arbitrage trading as part of their International Hawala operations," said the ED.

ED said it has found evidence of the involvement of Chartered Accountants and a few Bank officials. "Bogus invoices were generated and forged invoices in the name of 70,000 random names were entered into the tally database to justify the deposit of cash. The source of the crypto was not revealed by the accused persons." A complaint was made to the Crime Branch, Delhi Police sharing the findings unearthed during search operations conducted by the ED, the agency further said.

Consequently, the Crime Branch of Delhi Police registered a First Information Report against the syndicate members, pursuant to which an Enforcement Case Information Report (ECIR) was recorded by the ED for investigating the case under provisions of PMLA, 2002.