ED Busts International Hawala Syndicate: Arrests and Custody Granted in Massive Crypto Fraud Case
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Delhi, 19, June 2024- The Directorate of Enforcement (ED), Hqrs. Office, has made a significant breakthrough in its crackdown on financial malpractice, culminating in the arrest of Manideep Mago under the stringent provisions of the Prevention of Money Laundering Act (PMLA), 2002. Following his arrest, Mago was presented before the Hon’ble Court on 18.06.2024, where the ED was granted custody for five days until 23.06.2024, marking a pivotal development in the investigation.
The investigation was initiated based on actionable intelligence pointing to a Delhi-based company’s involvement in large-scale financial irregularities. Initial findings revealed that the company had executed cryptocurrency transactions exceeding Rs. 1858 Crore on various crypto exchanges. Moreover, foreign outward remittances totaling more than Rs. 3500 Crore and cash deposits exceeding Rs. 1300 Crore were traced to related entities, prompting ED to launch a search operation under the Foreign Exchange Management Act (FEMA).
During the search, ED unearthed an intricate International Hawala syndicate operating from Delhi. This syndicate orchestrated a scheme involving the collection of cash from exporters and importers, which was then remitted abroad under the guise of payments for fictitious services like ‘online lease of GPU servers for crypto mining’ and educational software leases. To facilitate these transactions, the syndicate had set up shell companies in Hong Kong and Canada.
The investigation further revealed that the syndicate had heavily invested in illegal crypto mining and arbitrage trading to launder funds internationally. Complicit in these activities were chartered accountants and certain bank officials who aided in the creation of bogus invoices and falsified records to justify the massive cash deposits.
In a proactive move, ED shared its findings with the Crime Branch of the Delhi Police, leading to the registration of an FIR against the syndicate members. Subsequently, ED recorded an Enforcement Case Information Report (ECIR) to probe the matter under the provisions of PMLA, 2002. Manideep Mago’s arrest by the Delhi Police prior to ED’s action underscored the gravity of the syndicate’s operations.
With the custody of Manideep Mago secured for custodial interrogation, ED’s investigation continues to unravel the intricate web of financial deceit orchestrated by this sophisticated syndicate.
