Mumbai hawala ‘king’ arrested for Rs 2,000 crore laundering
Mohammad Farooq alias Farooq Shaikh, one of the city’s biggest hawala operators, was arrested by the Enforcement Directorate (ED) on Tuesday in a Rs 2,253-crore money laundering case involving his Stelkon Infratel Pvt Ltd. Stelkon was part of Farooq’s network of 160 shell companies and was run from a one-room office in Zaveri Bazaar.
Farooq was on the radar of various probe agencies since 2014 and is believed to be associated with underworld elements, said officials.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. Last May, the CBI registered a case as it suspected the role of bank officials in the scam (see box). Subsequently, ED too registered a money laundering case against the same set of the accused.
ED officials said 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. The CBI FIR says it appears that the banks did not exercise any due diligence in verifying the genuineness of the importers and the documents submitted during the request for remittances. “There appears to be no cross-checking regarding the veracity of the bill of entry before permitting the amount to be remitted,” it added. Sometimes, against a single bill of entry, the fraudsters remitted money several times through multiples banks or branches. Or, based on forged documents, the importers inflated the value of the imports and remitted this inflated amount.