India’s ED arrests ‘hawala’ operator suspected to have facilitated transfer of over ₹1 lakh crore
03 Sep 2020

The Enforcement Directorate (ED) has arrested notorious “hawala” operator Naresh Jain, who along his accomplices is alleged to have facilitated illegal transactions involving more than ₹95,000 crore in India using over 600 bank accounts. The accused also got transferred about ₹11,500 crore overseas on various pretexts.

It is alleged that Mr. Jain ran an international syndicate of transferring funds through “hawala” channels using shell companies, tour-and-travel firms and through the formal banking network. He was once pursued by the law enforcement agencies of Italy and the United Arab Emirates. Earlier, he had also come under the scanner of authorities in the United States and the United Kingdom.

In its 2009 report shared with the Indian agencies, the U.K.’s Serious and Organised Crime Agency (SOCA) said it had been tracking a money laundering racket involving Mr. Jain, who was then allegedly operating from Dubai, and his accomplices since 2005. He was suspected to have links with Albanian drug traffickers.

The network was detected by the SOCA in coordination with the Italian and the Dubai agencies, as part of the operations codenamed “Keffel,” “Khyber Pass” and “Overgo”, for unearthing the collection-cum-distribution channels of the proceeds of the crime in the U.K. and Europe. The Dubai police arrested Mr. Jain in 2007 along with nine others. However, he was later released on bail, after which he escaped to India via Nepal in May 2009.

FEMA violations

The ED in January 2016 served a show-cause notice on him and others for alleged Foreign Exchange Management Act (FEMA) violations involving about ₹1,204 crore. The agency later registered a money laundering case against them, based on an FIR lodged by the Narcotics Control Bureau (NCB) in December 2009.

Mr. Jain was arrested by the NCB on December 6, 2009, following which he was picked up by the ED. He remained in judicial detention and custody for over a year.

By Devesh K. Pandey, The Hindu, 2 September 2020

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