In a major crackdown on black money and illegal money transfer, the Enforcement Directorate on Tuesday arrested Mohammed Farooq alias Farooq Shaikh, one of Mumbai's biggest hawala operators in a Rs 2,253-crore money laundering case.
In a major crackdown on black money and illegal money transfer, the Enforcement Directorate on Tuesday arrested Mohammed Farooq alias Farooq Shaikh, one of Mumbai’s biggest hawala operators in a Rs 2,253-crore money laundering case. 39-year-old Mohammed Farooq was arrested by the ED under the Prevention of Money Laundering Act (PMLA) for allegedly running a trade-based money laundering racket. The money laundering case pertains to an instance where 13 firms, including one identified as Stelkon Infratel Pvt Ltd, remitted about Rs 2,252 crore funds to overseas destinations during 2015-16 by submitting non-existent and forged import documents to the banks.
It said the actual bills of entry were only for Rs. 24.64 crore. As per The Times of India, the Directorate of Revenue Intelligence had investigated the case of inflated remittances abroad and submitted a report to the ED in 2016 for action under the Prevention of Money Laundering Act. The ED estimates the Farooq fraud scam could be over 10,000 crore.
Who is Mohammad Farooq alias Farooq Shaikh?
1. He is one of the biggest hawala operators in Mumbai.
2. Mohammad Farooq’s hawala empire has over 160 companies created on fictitious addresses with dummy directors like autorickshaw drivers.
3. Mohammad Farooq facilitates case transfers within India and abroad illegally for a fee. He also helps undervalue imports to escape duty.
4. The hawala kingpin arranges cash for corporate houses by accepting cheques and returning cash.
5. Farooq was allegedly operating about 135 bank accounts in various banks in Mumbai to send the funds abroad through hawala, an illegal process of sending funds overseas by skirting the regular banking channels.
6. Farooq used his accounts with co-operative banks to deposit cash collected from his clients. After routing the money through several layers of transaction, he would bring the money into his accounts, mainly in nationalized banks, and then make the remittances after submitting forged documents.
7. Mohammad Farooq ran his network of 160 shell companies from a one-room office in Zaveri Bazaar.
8. Farooq was on the hitlist of various probe agencies since 2014 and is believed to be associated with underworld elements.
9.In the case pertaining to Stelkon Infratel Private Limited, the ED said its probe found that these 13 firms had fake addresses and dummy persons as directors and Farooq used to “control” them indirectly and was the “kingpin” of this trade-based money laundering business.
10. As per ED officials, Farooq handled his hawala operations through illegal channels for a 2 percent commission. When businessman undervalue imports to pay less customs duty, the actual value has to be paid to the supplier. This is where Farooq manages to get his commission.