Demonetisation scam: ED attaches Rs 130 crore assets of Musaddilal, others

HYDERABAD: The Enforcement Directorate (ED) on Monday attached assets worth Rs 130 crore under Prevention of Money Laundering Act (PMLA) in Musaddilal Gems and Jewels Private Ltd and other jewellers in connection with demonetisation (DeMon) scam. The attached assets include 41 immovable properties registered in the name of various jewellers.
The ED attached assets in the form of stock-in-trade worth Rs 19 crore and investments made in the stock market in the form of shares.The attachment of assets includes gold jewellery, bullion and ornaments seized during the previous searches valued at Rs 83 crore.
The ED initiated a money laundering investigation against Musaddilal Gems based on an FIR lodged by Telangana police. During the investigations, the ED found that Musaddilal Gems, Vaishnavi Bullion Private Ltd and Musaddilal Jewellers Private Ltd had deposited demonitised notes of Rs 500 and Rs 1,000 (totalling Rs 111 crore) in their bank accounts immediately after November 8, 2016.
The accused raised fake cash receipts and sale invoices showing that around 6,000 fictitious customers had visited their showrooms to purchase gold jewellery between 8 pm and midnight on November 8, 2016, immediately after the announcement of demonetisation by the Centre.
Musaddilal Jewellers is owned by Kailash Chand Gupta.
The ED said: “Investigations under PMLA have revealed that companies of Kailash Gupta and his sons along with their chartered accountant Sanjay Sarda raised fabricated invoices for creation of fictitious sources of income to justify large cash deposits.”
Sanjay Sarda also advised the Guptas to raise fabricated invoices below Rs 2 lakh so that there would be no requirement of KYC proof or PAN of the customers. “Sanjay had also contributed demonetised cash for conversion and also received hefty commission for rendering this advice,” the ED charged.
The accused companies forged, fabricated and manipulated the documents and falsely claimed that these amounts are proceeds from the gold sales. Apart from converting their own unaccounted demonetised cash with the help of Kailash’s younger son Nitin Gupta, proprietor of Ashta Lakshmi Gold Bullion Neel Sundar Tharad and bullion dealer Pavan Agarwal, the firms actively solicited similar cash from other jewellers/friends and got the money deposited into their accounts to convert it into gold bullion.
“The converted gold was delivered back on a hefty commission. Many prominent jewellers and friends knowingly participated in this fraud to convert their unaccounted demonetised cash into gold. Immediately after depositing Rs 111 crore into their bank accounts, a major portion of these deposits was transferred to gold bullion dealers to buy bullion, which was later delivered to various jewellers, individuals and other entities,” the ED alleged.
During the investigation, the sleuths also found that the family of Kailash Gupta had made profit of Rs 28 crore by selling the converted gold at exorbitant rates. The total proceeds of the crime has been worked out to Rs 139 crore.