ED Arrests Mumbai Hawala Operator In Rs 2,500 Crore Money Laundering Case

| April 25 , 2018 , 12:18 IST

One of Mumbai's biggest hawala operators, Mohammad Farooq alias Farooq Shaikh, was on Tuesday arrested by the Enforcement Directorate in a Rs 2,253-crore money laundering case. The case involved his Stelkon Infratel Pvt Ltd firm which is a part of Farooq's network of 160 shell companies.

According to officials, Farooq had been on the radar of various probe agencies since 2014 and is believed to be associated with underworld elements as well. The Directorate of Revenue Intelligence investigated a case of inflated remittance abroad and submitted a report to the ED in 2016 for actions under the Prevention of Money Laundering Act.

ALSO READ: Money Laundering: RBI To Share Banks' Inspection Reports

The CBI then registered a case last May, suspecting the involvement of bank officials in the money laundering. The CBI FIR into the case claims that the banks did not exercise any due diligence in verifying the genuineness of the importers and the documents submitted.

 “There appears to be no cross-checking regarding the veracity of the bill of entry before permitting the amount to be remitted,” said the FIR.

During the probe it was learned that Stelkon and 12 other firms were used by Farooq for hawala transactions and import remittances, although on record the directors of Stelkon were Manish Shyamdasani and Mungaram Dewasi.

The role of Farooq would come in when businessmen undervalued imports to pay less customs duty but were required to pay the actual value to the concerned suppliers. Farooq would handle the transactions through illegal channels charging a 2% commission.

While the ED estimates that the total money laundering is worth more than Rs 10,000 crore, the current case concerns Rs 2,253 crore sent abroad by Farooq in 2015-16 through Stelkon and 12 other firms.