ED steps up searches at premises in Delhi and Kolkata in money laundering probe

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ED searches in Delhi and Kolkata

Highlights

The Enforcement Directorate uncovered illegal foreign remittances worth 569.03 crore rupees during raids in Delhi and Kolkata as part of a money laundering investigation.
The investigation found that Vaddi Mahesh and associates used shell companies to send funds to five companies in Singapore, Hong Kong and China between 2014 and 2017, without any actual software imports.
During the searches, the ED seized 47 lakh rupees in cash, 5,900 U.S. dollars, 2,200 AED, 5,600 RMB/CNY and important documents. Further action is ongoing.

This article was translated from the original. Read the original version by our correspondent here.

Search operation and basis of the investigation

According to the Enforcement Directorate (Enforcement Directorate), its Visakhapatnam Sub-Zonal Office initiated the action under the Prevention of Money Laundering Act, 2002, as part of an investigation into the illegal transfer of funds outside India, which was disguised as payments for importing customized software. Allegedly forged documents were submitted to banks. The investigation began on the basis of an FIR registered under various sections of the Indian Penal Code following a complaint by the Income Tax Department at the MVP Police Station in Visakhapatnam.

According to the agency, Vaddi Mahesh and others are accused of conspiring, preparing forged documents and passing them off as genuine to arrange foreign remittances through various banks. The investigation found that Vaddi Mahesh, along with his father and others, set up several companies registered in Kolkata and opened bank accounts in their names. Through these accounts, 569.03 crore rupees were allegedly sent to five companies in Singapore, Hong Kong and China under the guise of purchasing customized software. The ED says no software was imported against these remittances.

Alleged network, seizures and business impact

The ED says its investigation found that Bhimendra Kumar Goel, whom the agency describes as a habitual offender and who has been detained three times under COFEPOSA, was allegedly smuggling cosmetics, electronic goods and textiles into India while evading customs duties, including through the alleged misuse of the Customs Transit Declaration scheme available for Nepal. To pay foreign suppliers and allegedly disguise the proceeds of crime as legitimate, he contacted Vaddi Mahesh through associates.

According to the ED, between 2014 and 2017, Vaddi Mahesh received funds from various entities in the bank accounts of his shell companies and sent them abroad at the direction of Bhimendra Kumar Goel. The agency says the funds were placed in dormant or newly established companies in Singapore and Hong Kong, controlled by nominee directors, and were later transferred to accounts of companies linked to Bhimendra Kumar Goel and his family, including M/s Swiss Fox Pte Ltd and M/s Bhav Technology China Limited.

The investigation also alleges that Bhimendra Kumar Goel, in collusion with Pawan Kumar Ralli, operated fake firms such as M/s Mehak Overseas, M/s Karan Overseas and M/s Geet Enterprises at fictitious addresses in New Delhi. According to the ED, some of the alleged proceeds of crime were sent abroad through M/s Village Handicraft Export and reached Singapore-based M/s Eagle Mount Trading Pte Ltd, whose beneficial owner is said to be Ashish Todi.

During the searches, the agency seized 47 lakh rupees in unaccounted or unexplained cash, foreign currency equivalent to 5,900 U.S. dollars, 2,200 AED and 5,600 RMB/CNY, as well as a large number of allegedly incriminating documents, records, property papers and digital devices. The agency says these materials show how funds were layered through shell entities and sent out of India. Further investigation is ongoing.

Our previous report on Rajasthan's Nexa Evergreen investment fraud case discussed the next stage of the ED's PMLA investigation, which focused on funds collected from thousands of investors and an alleged fake returns scheme. The article mentioned the prosecution complaint, the shortfall that emerged after payments stopped, and actions such as the freezing and attachment of assets, including cash and bank/crypto funds.

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