New Delhi: Unearthing a racket involved in the illegal conversion of demonetized notes, the ED has arrested seven alleged middlemen and seized Rs 91.94 lakh in new currency in Karnataka as part of its money laundering probe.
Officials said the agency arrested the accused, including the brother-in-law of a state government official, under the provisions of the Prevention of Money Laundering Act (PMLA). The seized cash, the agency said, is in the form of Rs 2,000 notes. The case emerges from a December 1 seizure made by the Income Tax department here of Rs 5.7 crore in Rs 2000 notes. The Enforcement Directorate had booked a money laundering case against a number of people including S C Jayachandra, a Project Officer of State Highway Development Project, and others based on a CBI FIR in the case. Jayachandra was later arrested by the Enforcement Directorate (ED). “Based on his (Jayachandra) revelation during the course of investigation, seven persons including G Prashanth, brother-in-law of Jayachandra, who were supplying new currency in exchange of demonetised notes have been arrested and Rs 91,94,000 (4597 notes of Rs 2000) has been seized,” the agency said in a statement.
The modus operandi adopted by the alleged middlemen, officials said, was unearthed after ED officials launched a special operation and themselves posed as “customers” looking to get old currency exchanged illegally after paying commission to the said middlemen. The accused had set up a “systematic” network for supplying new currency notes in exchange of old/demonetised currency to various persons who had hoarded demonetised currencies. The customers could get their notes exchanged by paying 20-35 per cent commission.
“The said accused had supplied new currencies on many earlier occasions to Jayachandra through Prasanth and they fell into trap while making one such effort to supply new currency on December 4. The said new currencies were sourced from various parts of Karnataka,” the agency said. The role of a few bank officials and entry operators is also under the scanner, they said. Officials said the agency suspects that there is a chain of middlemen involved in converting black money into white.