ED attaches assets worth Rs 130.57 Crore in demonetization scam case

Hyderabad (Telangana) [India], February 1 : Directorate of Enforcement on Monday attached the movable and immovable assets worth Rs 130.57 Crore of Musaddilal Gems and Jewels Private Limited among others in a demonetization scam case.
In an official statement, ED informed that the agency had provisionally attached assets worth Rs 130.57 Crore including 41 immovable properties registered in the name of the various jewellers and others involved in the case and movable properties in the form of stock in trade (Rs 18.69 Crore) and investments made in the stock market in the form of shares (0.63 Cr) in demonetization scam case.
"The attachment also includes gold jewellery/bullion/ornaments seized during the earlier searches which are valued at Rs 83.30 Crore," it said,
ED initiated an investigation against Musaddilal Gems and Jewels Pvt Ltd and others based on the FIR registered by Telangana State Police, Hyderabad.
"During the investigation, it was revealed that Musaddilal Gems and Jewels Pvt Ltd, Vaishnavi Bullion Private Limited and Musaddilal Jewellers Pvt Ltd had deposited demonetized notes of Rs 500 and Rs 1000 to the tune of Rs 111 Crore in their bank accounts immediately post November 8, 2016. They had raised fake cash receipts and sale invoices showing that around 6000 fictitious customers visited their showrooms to purchase gold jewellery between 8 pm to midnight, on November 8, 2016, immediately after the announcement of demonetization," the statement said.
ED's investigation under Prevention of Money Laundering Act, 2002 (PMLA) revealed that the cited companies of one Kailash Chand Gupta and his sons in connivance with his chartered accountant Sanjay Sarda created fabricated invoices to justify the fictitious sources of income to further justify the large amounts of cash deposits.
"Sanjay Sarda advised them to raise fabricated invoices below Rs 2 lakh so that there would be no requirement of recording the KYC proof or PAN of the customers. CA also contributed demonetised cash for conversion and also received a hefty commission for rendering this advice," ED said.
The statement said that immediately after depositing around Rs 111 Crore cash into their bank accounts, the accused transferred a major portion of these deposits to gold bullion dealers to buy bullion, which was delivered to various jewellers/individuals/entities involved.
"Thus, demonetized notes were successfully placed and layered and finally integrated into the financial system. Further investigation revealed that the amount to the tune of Rs 111 Crore was pooled from various jewellers/individuals/entities. Majority of the jewellers admitted that they had contributed the cash. They again claimed that the demonetized notes were sourced from unknown customers. But they could neither provide the list of the customers nor explain the reason for depositing it in the accounts of Mussadilal jewellers instead of their own," ED added.
It also said that during investigation it was found that by selling the converted gold at an exorbitant profit, the family of Kailash Gupta derived further profits to the tune of around Rs 28 Crore.
"The total proceeds of crime, in this case, is thus worked out at Rs 139 Crore. Earlier two searches were conducted by ED and Jewellery worth an amount of Rs 83.3 Crore was seized," said ED.
Notably, a prosecution complaint is also filed before the PMLA Court by ED and a supplementary prosecution complaint has also been filed on September 25, 2020. The court has taken cognizance of the ED's charge sheet. With this provisional attachment order, the total attachment of the proceeds of crime has reached Rs 130.57 Crore.
ED said the further investigation is under process.