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ED attaches 16.42 Cr assets in VAT scam

Dec 06, 2024 07:30 AM IST

The ED has provisionally attached assets worth ₹16.42 crore in a money-laundering probe linked to bogus entities involved in ₹458.24 crore sales fraud.

MUMBAI: The Enforcement Directorate (ED) has provisionally attached assets worth 16.42 crore as part of its money-laundering probe related to a set of bogus entities allegedly involved in raising dubious sales bills worth 458.24 crore and non-payment of Value Added Tax (VAT) worth 28.34 crore. The movable-immovable assets belonging to several accused persons were attached under the provisions of the Prevention of Money Laundering Act (PMLA).

ED attaches <span class='webrupee'>₹</span>16.42 Cr assets in VAT scam
ED attaches 16.42 Cr assets in VAT scam

The agency began its probe based on a case registered by the Sangli police under Section 420 (fraud) of the Indian Penal Code against a few fake entities, including Trishul Enterprises. It was alleged that these fake entities were involved in the raising of bogus sales bills amounting to 458.24 crores to different entities all over Maharashtra and had not paid not VAT of 28.34 crores, thereby committing offences under Section 420 and the Maharashtra Value Added Tax Act.

The ED’s investigation revealed that fake invoices to the tune of 919 crore had been allegedly raised using 17 dubious entities without a single genuine sale or purchase of goods ever made. These fake entities were opened in the name of dummy persons and were being allegedly controlled by the accused persons. The probe revealed that individuals like Suresh Parekh, Dinesh Parekh and Sushant Ladda were allegedly the kingpins of the VAT scam and used to control all the entities and involved persons. Through this method, a commission of two per cent of the value of the fake bills, amounting to 18.67 crore, was allegedly earned by the three accused, which was further distributed.

“The commission thus earned is the case’s Proceeds of Crime which were generated as a result of criminal activity related to the scheduled offence of issuance of fake sale bills,” said an ED official. The ED had earlier conducted a search operation in June 2023 at the residential premises of the key accused persons. During the searches, various incriminating documents, along with unexplained cash of 59.5 lakh, were seized, which allegedly established the modus operandi employed by the accused persons, said the ED official.

12.44 cr assets attached in smuggling case

The Mumbai unit of the ED, meanwhile, also attached provisionally immovable assets worth 12.44 crore as part of a separate money-laundering probe against a few individuals accused of smuggling a protected wood species called Red Sanders. The smuggled consignments were allegedly passed off as fabric glue/radiators/assorted colours by submitting forged documents of companies located at Special Economic Zones. The agency has attached assets belonging to B Malik, C Bhansali and D Rao under the provisions of PMLA.

The ED probe is based on a Directorate of Revenue Intelligence chargesheet filed against Malik, V Poojary and a few others for offences committed under various sections of the Customs Act. The ED had earlier in December 2021 conducted a search at the residences of Malik, Poojary and others, which yielded various incriminating documents. Malik was arrested by the ED in December 2021. The ED has so far attached assets worth 72.45 crore in the case.

The ED investigation revealed that Malik was allegedly engaged in smuggling activities from 2008 to 2010 and 2014 to 2015 and had generated Proceeds of Crime worth 94 crore. For the purposes of laundering this money, he had allegedly established a firm, and through accommodation entries, infused share capital from multiple bogus companies in lieu of cash. Malik and his associates had allegedly used the firm to purchase multiple immovable assets thereafter.

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