ED uncovers 250 shell companies linked to Malegaon money laundering case, exposing multiple criminal syndicates | Representative image
Mumbai: The Enforcement Directorate (ED) has unearthed alleged laundering of at least Rs 1,000 crore by a syndicate with links to criminal gangs. There are indications that the amount ultimately laundered may be much higher. However, the basic question of what is the source of these massive finds still needs to be answered by identifying a vast network of 250 ‘shell and benami’ firms across 21 states linked to the Malegaon money laundering case. Investigations reveal that in the initial phase, 201 identified fake companies were used to park illegal funds, which were then funneled through seven to eight phases and channeled through nearly a thousand shell entities. This tangled financial web facilitated the laundering of over Rs 1,000 crore in multiple accounts nationwide before the money was shifted abroad, official sources said.
The ED investigation reveals that apart from the operation led by Mehmood Bhagat, also known as the ‘Challenger King’, who is absconding, the alleged extortionist who also resided in Malegaon had involved Siraj Mohammad in facilitating the money laundering of money. Several other criminal groups and syndicates were also linked to the benami accounts of 201 fake companies. These syndicates form a complex network spanning various parts of the country and beyond, as identified by the agency.
As part of its investigation, the ED has issued notices to several banks, asking for detailed Know Your Customer (KYC) information and transaction data related to these dubious accounts.
The investigation has so far traced the movement of Rs 1,000 crore through 14 banks, including Nashik Merchant Cooperative Bank, which was identified a few days ago. Of this amount, Rs 14 crore was reportedly withdrawn by the arrested suspect, Siraj Mohammad, in Malegaon and transferred to Mumbai through a hawala operator. The remaining funds were diverted to 21 other shell companies located in Navi Mumbai, Surat, Ahmedabad, Rajkot and Chhattisgarh. These companies were established within a short period of time and were used to accumulate and further transfer illicit funds abroad.
In a recent search operation, the ED seized Rs 13 crore from hawala operators in Mumbai and Ahmedabad, linked to the laundering of the Rs 14 crore sent through hawala by the arrested suspect, Siraj Mohammad, from Malegaon. The safety of the operators is also under investigation, and the case is ongoing.
During the investigation, the financial investigation agency also identified several fake companies registered in Dubai that received Rs 600 crore as part of the Rs 1,000 crore. Officials suspect that other syndicates may also be involved in laundering large sums of money through money transfers.
According to officials, the case involves over Rs 1,000 crore and also involves other syndicates currently under investigation. The Maharashtra government has transferred the investigation to the Maharashtra ATS over suspicions of terror financing.
Officials are aware of the investigation and suspect that the money transferred through these 250 primary bank accounts may be linked to a range of illegal activities, including Ponzi fraud, a gambling app syndicate, cybercrime and narcotics trafficking. The accounts appear to have been used solely to raise money, which was then transferred to other accounts opened by the arrested suspect, Siraj Mohammad, and other unidentified persons.
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