Haryana Black Money Scam: Gang Used Fake Companies and Dummy Directors to Launder ₹700 Crore Overseas
In a sophisticated financial scam, Haryana’s State Crime Branch has uncovered a network of fake companies and forged documents used to illegally send approximately ₹700 crore abroad. The gang behind this elaborate scheme fabricated business transactions, involving dummy directors and false documentation, to funnel black money overseas, masking their activities as legitimate trade through the ports of Gujarat and Mumbai.
Discovery and Investigation
The investigation began on March 18, when Haryana Police received a complaint suggesting the existence of a large-scale money laundering scheme. Recognizing the potential magnitude of the operation, the Haryana Director General of Police, Shatrujeet Kapoor, directed the formation of a Special Investigation Team (SIT). The SIT, led by Additional Director General of Police of the State Crime Branch and Gurugram Deputy Commissioner of Police Nitish Agarwal, began delving into the details of the alleged scam.
During the investigation, it was discovered that the accused had registered a series of shell companies under the names of dummy directors. These directors were often fictitious individuals or unwitting accomplices used to create a façade of legitimacy. To open bank accounts under these dummy identities, the gang reportedly collaborated with certain bank employees who enabled them to bypass usual verification processes, including eKYC checks. By keeping ATM cards, net banking passwords, and registered SIM cards of these accounts, the gang maintained complete control over all transactions.
Modus Operandi: Fake Import-Export Operations
The accused orchestrated a web of fabricated import and export transactions between these shell companies and foreign entities. By presenting falsified invoices and overinflated pricing of goods, they created the illusion of high-value trade, enabling them to transfer massive sums of money abroad. Ports in Gujarat and Mumbai were key points of transaction, through which the goods were purportedly imported or exported.
To disguise the true nature of their operations, the accused used multiple strategies to evade detection. They produced a range of fake documents, including ROC (Registrar of Companies) records, CGST filings, bank statements, and import-export certifications. By presenting different business premises and financial records, the gang effectively misled various oversight bodies such as the Directorate of Revenue Intelligence (DRI), Customs Department, Enforcement Directorate, and the Central GST.
The inflated invoices served a dual purpose: they allowed the accused to artificially increase the value of imported goods, justifying larger financial transfers, and ensured substantial profit margins. The gang reportedly charged hefty commissions on every dollar sent abroad, pocketing a percentage for every transaction as they inflated the invoiced prices far beyond the market value of the goods listed.
Complex Financial Maneuvering
In addition to faking business transactions, the gang also orchestrated complex financial maneuvers within the country. Money was transferred to the shell company accounts by creating the illusion of sales and purchases between these entities. Funds from various other companies’ accounts were channeled into these accounts, eventually making their way into foreign accounts in dollars. This process not only enabled the gang to launder money but also to layer the transactions, making it harder for authorities to trace the origin of the funds.
The gang used a tactic known as “round-tripping,” where goods were rented from foreign companies and presented as purchases in financial records. After a certain period, these goods were then marked as exported, creating a cycle of fake import and export activities. The payment for imported goods was directed to the foreign companies’ accounts, but the money from supposed exports did not return, thus maintaining the outward flow of money without any actual trade occurring. This cycle allowed them to funnel funds abroad under the guise of legitimate trade transactions.
Arrests and Evidence Collection
As of the latest updates, seven individuals have been arrested in connection with this operation, and five others have had charges filed against them in court. The SIT’s investigation led to the discovery of various incriminating materials, including fake company documents, around 26 mobile phones, laptops, and company seals. This evidence further solidified the case, offering insight into the extensive operations and the tools the accused used to sustain their activities.
The investigation also identified the geographical origins of the accused individuals, revealing that three of them are residents of Delhi, while others are from Dehradun, Jhajjar, Sonipat, and Faridabad. This network spread across different regions indicates the wide reach of the operation, with associates in multiple locations working together to maintain the scam’s efficiency and scale.
Additionally, one of the arrested individuals has a history of criminal charges, including cases related to murder and grievous injury. This suggests that some members of the group may have a background in organized crime, raising further questions about their potential connections and activities beyond the current case.
Efforts to Evade Detection
The gang’s success in operating such an extensive laundering scheme relied on their meticulous efforts to evade detection. By fabricating extensive documentation and spreading their transactions across multiple shell companies, they managed to avoid scrutiny from critical government bodies tasked with monitoring financial transactions. Their use of inflated invoices, false records, and rented goods allowed them to continuously send money abroad without raising immediate red flags. Their ability to manipulate financial records also indicates a strong understanding of loopholes within India’s regulatory framework, which they exploited to create an outward appearance of legitimacy.
The Larger Implications
This case has broader implications for India’s financial and regulatory system, highlighting vulnerabilities in compliance and oversight mechanisms. The ability of the gang to manipulate KYC procedures and coordinate with certain bank employees reflects the potential risks in banking security. Additionally, the involvement of multiple shell companies and fabricated directors calls attention to the need for stricter company registration protocols and regular audits, especially for entities engaged in import-export transactions.
Such incidents underscore the importance of strengthened cooperation among various regulatory bodies, including the DRI, Enforcement Directorate, and Customs, to develop mechanisms that can better detect and prevent financial crimes. Enhanced monitoring of high-value transactions and suspicious trading patterns could help curb such activities in the future.
Conclusion
The ₹700 crore laundering scam exposed by Haryana’s State Crime Branch reveals the lengths to which criminal enterprises will go to exploit regulatory loopholes for illicit gains. The sophisticated operation, involving shell companies, dummy directors, and fabricated transactions, allowed the accused to siphon massive sums of black money out of the country under the guise of legitimate business activity.
The arrests and ongoing investigation by the SIT demonstrate law enforcement’s resolve to tackle financial crimes of this scale, but they also serve as a reminder of the persistent challenges in curbing money laundering activities. Strengthened financial regulations, improved cross-agency coordination, and enhanced scrutiny of business transactions are critical to safeguarding India’s financial integrity and preventing similar scams from undermining the economy in the future.