ED files prosecution complaint against Hyderabad firms in 2016 scam

New Delhi, Jun 1 (UNI) Enforcement Directorate (ED) on Tuesday said that it has filed a Prosecution Complaint in the infamous demonetization scam in which cash of around Rs 111 Crore was deposited immediately after the announcement of demonetization on 8th November, 2016 by the jewellery firms of Kailash Gupta, Nitin Gupta and Nikhil Gupta in Hyderabad.

The officials in the agency said that two prosecution complaints were filed earlier by the Department against 13 individual /entities while final prosecution complaint was filed on May 31 after extensive investigation and has charged the main accused persons Kailash Gupta, Nitin Gupta, Nikhil Gupta and their firms; their Chartered Accountants; the gold bullion dealers; and also the major contributors of the black money, who were involved in this fraud.

ED initiated money laundering investigation against Musaddilal Gems and Jewels Private Limited, Vaishnavi Bullion Private Limited, Musaddilal Jewellers Private Limited and others on the basis of an FIR registered by Telangana police.

The federal financial probe agency investigation revealed that the accused used Demonetisation Scheme to bleach their unaccounted black money into white money and also to earn windfall profit.

Officials in the agency said that these firms blatantly created around 5911 fictitious sale invoices attributing fake sales during the short relaxation period between 8PM to 12PM and deposited a whooping amount of Rs 111 Crore in their bank accounts.

“The major part of deposited black money belonged to the main accused and his family members and remaining was solicited from others on commission basis. They used a part of the amount to repay their loans, pay due taxes and used the remaining amount to buy gold (Bullion)”, they further said adding that this bullion was further sold at a very high rate to earn even more profits.

ED, after extensive fund trail investigation found out total ‘proceeds of crime’ of Rs 139 Crore while a provisional attachment Order was also issued on February 1, this year attaching both movable and immovable properties worth Rs 130.57 Crore, including jewelleryworth Rs 86 Crore, seized during the searches conducted agency sleuths.

A total of 41 entities/individuals have been charged with the offence of money laundering, as they knowingly layering amount into the Bank Accounts of Musadilal Group to claim the same as untainted money, then converted the same into Gold bullion which was further sold for profit.