ED secures conviction of five in Ghaziabad money laundering case

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Ghaziabad money laundering: 5 convicted

Highlights

A special court in Ghaziabad sentenced five convicts, including V.N. Mathur, to three years of rigorous imprisonment and a fine of 50,000 rupees in a money laundering case.
The ED investigation found that in 2006-07, a Syndicate Bank branch manager sanctioned loans using forged documents, withdrew the illicit funds and layered them.
These illicit funds were integrated through the purchase of properties in Alipur, J.P. Nagar and Dehradun, exposing fraud in the banking system.

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

Bank loan conspiracy and court verdict

According to a press release from the Enforcement Directorate, the Special Judge in Ghaziabad convicted V.N. Mathur, Rajeev Kumar, Arvind Chaudhary, Ankit Chaudhary and Pramod Kumar in Case No. 5/23 under Section 3 of the Prevention of Money Laundering Act, 2002, which is punishable under Section 4, according to the Directorate of Enforcement. The court sentenced all five to three years of rigorous imprisonment and imposed a fine of 50,000 rupees, with three months of simple imprisonment in default of payment.

The ED investigation began on the basis of two FIRs registered by the Central Bureau of Investigation, ACB Ghaziabad, following a complaint by Syndicate Bank's chief vigilance officer. In the scheduled offence case, the Special Judge, CBI Court No. 2, Ghaziabad, had convicted V.N. Mathur, then branch manager, under the Indian Penal Code and the Prevention of Corruption Act, 1988, while Rajeev Kumar and Pramod Kumar were acquitted. However, based on the evidence and records presented by the ED, both have now been convicted in the money laundering case.

Flow of funds and regional impact

The investigation found that V.N. Mathur, manager of Syndicate Bank's Gajraula branch, allegedly entered into a criminal conspiracy during 2006-07 with the late Narendra Singh, Arvind Chaudhary and others. Under the alleged conspiracy, loans and overdraft limits were sanctioned on the basis of forged sale deeds for non-existent properties, fake non-encumbrance certificates and fraudulent valuation reports.

The ED said that instead of being used for their sanctioned purpose, the loan proceeds were withdrawn in cash and routed through various savings accounts and demand drafts in layers to conceal their illicit origin. The funds were then allegedly integrated by purchasing immovable properties in Alipur, J.P. Nagar district and Dehradun. The case highlights enforcement agencies' tough action against document-based fraud in the banking system, failures in loan monitoring and the conversion of illicit funds into assets.

Our previous report mentioned the provisional attachment of two immovable properties in Delhi (Rohini) and Uttar Pradesh (Aligarh) by the ED as part of an ongoing money laundering investigation against Kusum and her associates. According to that report, the agency had alleged that cash generated from an alleged drug business was routed through bank accounts and relatives, and later used to buy immovable properties. Further investigation into the case is ongoing.

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