ED Freezes ₹1.99-Crore Property Trail in Manipur Customs Officer’s Disproportionate Assets Case

Agency alleges illicit funds were layered through father-in-law, routed as ‘gift’ and invested in land and residential buildings

(Judicial Quest News Network)

Imphal, August 12: In a significant development in a Prevention of Money Laundering Act (PMLA) investigation, the Directorate of Enforcement (ED), Imphal Sub-Zonal Office, has provisionally attached two immovable properties valued at approximately ₹1.99 crore in Manipur.

The properties comprise homestead lands along with residential buildings constructed thereon, located in Kangpokpi district and Imphal East district.

The attachment has been carried out under Section 5(1) of the PMLA, 2002, in connection with the case of Seikholen Kipgen, then Inspector of Customs and Central Excise, and others.

The ED’s action follows a money-laundering investigation arising from an FIR registered by the Central Bureau of Investigation’s Anti-Corruption Branch, Imphal, against Kipgen under the provisions of the Prevention of Corruption Act, 1988.

The CBI case relates to allegations that the officer possessed assets disproportionate to his known sources of income.

The CBI, ACB, Imphal, subsequently filed a charge sheet before the competent Special Court on December 22, 2022, in respect of the scheduled offence.

₹1.99 crore assets allegedly beyond known income

According to the ED, its investigation examined the financial affairs of Seikholen Kipgen and his family members during the check period between January 1, 2015, and December 3, 2021.

The agency alleges that the assets held or acquired by the family increased substantially during this period and were disproportionate to the known sources of income by approximately ₹1.99 crore.

The property value identified by the ED has consequently been treated as representing the alleged proceeds of crime under the PMLA framework.

The original disproportionate-assets case against the Customs official was reportedly registered by the CBI in December 2021.assamtribune+1

Father-in-law allegedly used as financial conduit

A crucial aspect of the ED investigation concerns the alleged movement and layering of unaccounted funds.

The agency claims that funds allegedly generated from illegitimate sources were placed by Seikholen Kipgen with his father-in-law for “safe custody”.

The father-in-law allegedly deposited the funds into his own bank account and later transferred them to:

• Seikholen Kipgen;
• Kipgen’s wife;
• Third parties; or
• Vendors, through direct payments made on Kipgen’s instructions.

The ED alleges that the funds were thereby layered and routed through multiple transactions before being used for the purchase of land and construction of a residential building in the name of Kipgen’s wife, Smt. Vahneithem Lucy Kipgen.

According to the agency, the transactions were subsequently projected as legitimate money in the form of a gift from the father-in-law.

The ED has alleged that the father-in-law was prima facie acting as a conduit and did not possess the independent financial capacity to make such a gift.

Properties held in two names attached

The investigation allegedly revealed that illicit and unaccounted funds were used for the acquisition and construction of two immovable properties.

One property is held in the name of Seikholen Kipgen, while the other stands in the name of his wife, Vahneithem Lucy Kipgen.

The ED has provisionally attached both properties on the ground that they represent, or correspond to the value of, proceeds of crime under the PMLA.

The attachment is provisional in nature and will remain subject to adjudicatory proceedings under the statutory mechanism provided by the PMLA.

The ED’s allegations are yet to be finally adjudicated by the competent court or authority.

Further probe underway. The Enforcement Directorate has stated that further investigation is in progress.

The case brings into focus the PMLA’s tracing mechanism, under which assets allegedly acquired through proceeds of crime may be attached even where the property is held in the name of a family member or another person, provided the agency establishes the alleged link between the property and the underlying scheduled offence.