Bank officials at several Indian banks are to be questioned for their role in a multi-million US dollar trade-based money laundering (TBML) operation.

India’s Enforcement Directorate (ED) has already arrested Mumbai-based Mohammed Farooq for allegedly running the operation that is estimated to have netted US$339 million.

Overvalued goods

Farooq allegedly used 13 firms to remit US$339 million to overseas destinations during 2015-16 by submitting forged import documents to banks.

The value of goods related to the remittances according to their bills of entry was under US$4 million.

Ghost operations

The ED found that the 13 firms had fake addresses and dummy persons as directors.

Farooq allegedly operated around 135 bank accounts in various banks in Mumbai to send the funds abroad through the hawala money exchange system.

Scrutiny for banks

Banks associated with the scam have already drawn criticism from India’s Central Bureau of Investigation (CBI). It has accused “unknown bank officials” of not undertaking proper verification of what turned out to be fraudulent documents.

The CBI says it anticipates calling bank officials into the inquiry. “It appears that the banks concerned, which were part of the transactions, have not exercised due diligence in verifying the genuineness of the importers and the documents submitted during the request for remittances,” a CBI official told local media.

Categories: Trade Based Financial crimes News