PMLA Case: ED attaches diamond trader’s assets

The Enforcement Directorate (ED) has attached assets worth Rs7.63 crore of Mumbai-based diamond trader Madanlal Jain in a bogus import case being investigated by the agency under provisions of the Prevention of Money Laundering Act (PMLA), 2002.

The ED had arrested Jain in 2014 in the Surat hawala money laundering case, in which over Rs5,395 crore hawala funds were alleged to have been sent as illegal outward remittances on the basis of import documents or fake bills of entry through an ICICI Bank branch in Surat.

According to the ED, the immovable assets attached are 15 plots measuring 3848.93 sqm worth Rs4.80 crore at Gam-Katargam, Surat held in the name of Rivertouch Resorts Pvt Ltd, a company controlled by Jain. The ED also attached movable property in the form of Rs2.83 crore as balance in Jain’s accounts with Canara Bank’s Girgaum branch.

The agency said its probe under the PMLA, 2002 was initiated on the basis of a complaint received by the Crime Branch, Surat from ICICI bank against RA Distributors Pvt Ltd and others, alleging the companies had prepared fake bills of entry and presented them before ICICI Bank for illegal outward remittances.

In March 2014, the ED had busted a multi-crore hawala racket after searches were carried out at the offices in Surat of some diamond traders, including Jain. The traders had allegedly made bogus import bills claiming they had purchased diamonds from foreign traders, and transferred money through their bank accounts without actually importing any diamonds into India.

The ED probe revealed nine companies with accounts in ICICI Bank, Surat had remitted a huge sum based on forged bills of entry to three firms in the UAE and 15 companies in Hong Kong. The agency said the main sources of credits in these accounts are from eight entities – which inlcude Vandana & Co, Natural Trading Co, Maruti Tading — having accounts in Axis Bank, apart from 469 other entities.

The eight entities had allegedly received funds through various cheque discounters and a web of 2,700 companies. According to the ED, inquiries further revealed that Afroz Mohamed Hasanfatta, Madanlal Jain, Bilal Haroon Gilani, Jayesh Desai, Rakesh Kothari were accused involved in the racket. They allegedly created shell firms using dummy per­sons as directors or partners.

The ED’s probe allegedly also revealed Jain had earned a commission for his role in the illegal transactions of foreign remittances made on the strength of fake bills of entry, and he was the beneficiary of the proceeds of crime laundered and transferred from Indian companies to the accounts of Dubai-based Mabrook Trading FZE, on the strength of forged bill of entries.

ED had earlier arrested Afroz Mohamed Hasanfatta, Madanlal Jain, Manish Shah, Rakesh Kothari and Jayesh Desai and attached their properties worth Rs26.55 crore, and also filed five prosecution complaints against them before the designated Special Court (PMLA) in Ahmedabad. The attachment of Jain’s assets has raised the total attachment to Rs34.18 crore.