₹1,047-Crore Liquor Laundering Syndicate Unearthed: ED Prosecutes 19 Accused in Assam–Arunachal Excise Scam Under PMLA

(Judicial Quest News Network)

New Delhi, July 29: The Directorate of Enforcement (ED), Guwahati Zonal Office, has filed a Prosecution Complaint under the Prevention of Money Laundering Act, 2002 (PMLA) against 19 accused persons, including alleged kingpins Sanjay Dewan, Niraj Sharma, Rajan Lohia, Shankar Deb, and Sameer Mehta, along with 14 bonded warehouse entities, in connection with an alleged multi-crore interstate liquor smuggling and money laundering racket operating across Assam and Arunachal Pradesh.

The prosecution stalks from an Enforcement Case Information Report (ECIR) registered on the basis of 173 FIRs lodged by the Assam Police in various districts along the Assam–Arunachal Pradesh border.

According to the ED, its investigation has uncovered a highly organized and vertically integrated criminal enterprise allegedly engaged in the clandestine manufacture, transportation, and large-scale smuggling of liquor from Arunachal Pradesh into Assam.

The liquor, bearing labels marked “For Sale in Arunachal Pradesh”, was allegedly transported without valid transit permits or Excise Verification Certificates (EVCs) to evade significantly higher excise duty and Value Added Tax (VAT) leviable in Assam.

The agency cited seizure records compiled by the Assam Excise Department, revealing that more than 2.63 lakh bulk litres of illegally transported liquor, valued at approximately ₹52.77 crore, were seized in 739 separate incidents between January 2023 and April 2026.

The ED contends that these seizures represent only a fraction of the overall volume of liquor allegedly smuggled by the syndicate.

Alleged Monopoly Through Proxy Licences

The ED alleges that the principal accused Sanjay Dewan, Niraj Sharma, and Rajan Lohia established a virtual monopoly over Arunachal Pradesh’s liquor trade by exercising control over an extensive network of manufacturing units, bonded warehouses, wholesale outlets, and retail liquor businesses.

According to the investigation, statutory excise licences, originally issued to indigenous residents in accordance with the state’s excise policy, were unlawfully acquired and controlled by the accused without mandatory approvals from district and excise authorities.

The licence holders were allegedly reduced to nominal name-lenders who received fixed monthly payments, while the accused retained complete beneficial ownership and operational control through undisclosed agreements.

The prosecution complaint further alleges that manufacturing entities and bonded warehouses were managed through dummy directors’ employees who had no real managerial authority and allegedly acted solely on the instructions of the principal accused.

These individuals were reportedly required to sign blank cheques and execute documents while having no role in policy or financial decision-making.

The ED has also alleged that manufacturing units systematically expanded their production capacity without corresponding payment of statutory duties, thereby generating substantial quantities of unaccounted liquor intended for illegal distribution.

Four-Tier Money Laundering Mechanism

The ED claims to have traced the proceeds of crime through a sophisticated four-stage laundering process designed to integrate illicit cash into the formal financial system.

According to the investigation, proceeds generated from the illegal retail sale of liquor in Assam were first channelled into wholesale liquor entities through hawala operators.

To avoid triggering regulatory reporting requirements, the syndicate allegedly split invoices into amounts below ₹2 lakh and structured cash deposits below the ₹10 lakh reporting threshold.

The agency has quantified approximately ₹1,047.93 crore in cash deposits received by nine wholesale entities, which it has identified as proceeds of crime.

The funds were thereafter allegedly transferred through RTGS and NEFT transactions to 14 bonded warehouse entities before being consolidated at the manufacturing level.

Ultimately, the money was allegedly projected as legitimate business income and distributed as profit shares to individual and Hindu Undivided Family (HUF) accounts before being invested in movable and immovable assets.

Hawala Network and Digital Evidence

Searches conducted across multiple premises in Assam and Arunachal Pradesh reportedly led to the seizure of incriminating digital devices and documentary evidence.

The ED stated that forensic examination of seized mobile phones exposed an extensive interstate hawala network facilitating the movement of illicit cash from cities including Guwahati, Delhi, Ranchi, and Hyderabad into Arunachal Pradesh.

Investigators claim that coded expressions such as “Books,” “Box,” “KG,” and “Bag” were allegedly used to denote cash transactions running into lakhs of rupees. Images of low-denomination currency notes bearing specific serial numbers were also allegedly exchanged as authentication tokens to verify hawala deliveries.

Assets Frozen and Cash Seized

During the course of the investigation, the ED seized ₹52.10 lakh in unexplained cash and froze bank balances and fixed deposits amounting to ₹26.59 crore under the provisions of the PMLA.

According to the agency, the Adjudicating Authority under the PMLA has since confirmed the retention of these assets.

Income Tax Findings Corroborated

The prosecution complaint further states that findings from the Income Tax Department independently corroborated the investigation.

The ED alleges that the principal accused had previously made voluntary disclosures of substantial undisclosed income, reinforcing allegations of their financial control over the liquor network and systematic tax evasion.

The Directorate of Enforcement has stated that further investigation into the alleged money laundering conspiracy is continuing.