New Delhi: The ED has found that an organised syndicate, which operated a Rs 1,500-crore betel nut smuggling ring along the India-Myanmar international border, allegedly used forged GST invoices and routed "illicit" funds through some rural bank accounts in Mizoram via a hawala network.
The central agency said in a statement on Monday that its Guwahati zonal office unearthed the alleged modus operandi after it conducted multi-state searches at 20 premises in Assam, Mizoram, West Bengal and Uttar Pradesh on July 3.
Follow The PSUWatch Channel on WhatsApp
The investigation pertains to a "large, organised syndicate" engaged in smuggling betel nut (areca nut) across the India-Myanmar border and subsequent money laundering.
The ED's case, filed under the Prevention of Money Laundering Act (PMLA), stems from multiple FIRs by the Assam Police and the Directorate of Revenue Intelligence (DRI), another central agency under the Union Finance Ministry.
The ED said the syndicate operated through a network of suppliers predominantly based in Mizoram's Champhai district, facilitators based in Assam, consignees/financiers spread across West Bengal and Uttar Pradesh and an entity in Kolkata that provided invoices (facilitating circular trading).
Follow PSU Watch on LinkedIN
"The syndicate smuggles foreign-origin areca nut from across the Indo-Myanmar border via the Champhai-Zokhawthar route, even though Champhai grows none itself," the ED said.
Production data obtained from central and state government agencies established that Champhai, from where the bulk of the consignments were shown to originate, recorded zero domestic production of areca nut during the relevant years, it said.
"This corroborates that the goods were of smuggled, foreign origin routed through the Indo-Myanmar border," the ED said.
The syndicate used "forged" GST invoices, "bogus" supplier and buyer firms and "false" transport papers.
"The proceeds are then layered through buyers in West Bengal and Uttar Pradesh who pay Silchar/Assam hawala operators, who subsequently route the money mostly through Mizoram Rural Bank transit accounts that mask the real depositors before it reaches the Champhai smugglers.
"Finally, large cash withdrawals from those accounts are sent back to the Myanmar suppliers via hawala, completing the laundering cycle," the ED said.
According to the agency, proceeds of crime worth more than Rs 1,500 crore were generated by the syndicate.
The investigators seized diaries, title deeds, property documents, Rs 1.30 crore in cash and froze 33 bank accounts during the searches.
(PSU Watch is India's Business News centre that places the spotlight on PSUs, Bureaucracy, Defence and Public Policy. 👉 Click to join our channel now: PSUWatch WhatsApp Channel. Prefer LinkedIn? Follow PSU Watch on LinkedIN. Click to stay connected on Twitter here and stay updated)