India’s Directorate of Revenue Intelligence (DRI) has unearthed a trade-based fraud involving at least six textile exporters who allegedly laundered at least US$30 million in the last eighteen months.
The Mumbai-based exporters allegedly laundered the money using forged currency declaration forms (CDFs) and bogusly claimed they had exported textiles on which they fraudulently obtained duty drawback from the government.
Typically, CDFs are available at airports and used by passengers to declare foreign exchange of amounts of US$5,000 or more brought into the country to customs.
Forms are countersigned by customs officers for verification after which foreign currency can be deposited in a bank on production of the verified CDF.
The textile exporters allegedly forged CDFs in the names of fictitious passengers and faked customs officials’ signatures so that it appeared that large amounts of foreign currency were brought into the country.
The exporters then bought foreign currency of the amount declared in the forged CDFs on the black market and deposited it in their accounts, claiming they obtained the money from foreign buyers who visited India.
The foreign currency deposited was shown as export earnings or advance payments against exports.
This enabled the exporters to claim duty drawback of US$2.5 million from the government by declaring these deposits as proceeds against bogus textile exports.
Categories: Trade Based Financial crimes News