India’s Enforcement Directorate has arrested two more people allegedly involved in a US$225 million trade-based money-laundering (TBML) operation based on importing what purported to be customised software.

Investigators however discovered that the software was fake but provided the accused with the opportunity to transfer funds abroad under the guise of what appeared to be genuine payments for imported software.

Shell companies

The arrests of Deepak Agarwal and Ayush Goyal follow the arrests of several other suspects in the case, including Vaddi Mahesh who colluded with others to incorporate around 200 shell companies in India and open bank accounts in their names.

Funds were received from various individuals, including Agarwal and Goyal, and deposited in those bank accounts before being transferred to other shell companies.

Forged documents

The funds were then remitted to various companies in Singapore, Hong Kong and China in the guise of payments for what purported to be customised software.

Forged invoices were raised by the Southeast Asian entities while fake certificates apparently showed that the software had been downloaded in the presence of chartered accountants. These certificates were submitted to the banks as proof of import.

Ongoing investigations

Agarwal is the director of one of the Hong Kong-based companies that received foreign remittances equivalent to around US$45 million while Goyal had supplied cash to Mahesh and instructed him to remit the funds abroad.

In 2017 when Mahesh was arrested he was thought to be the mastermind behind the TBML scam but it later transpired that the alleged kingpin in the scam is Bhimender Kumar Goyal who was arrested last year and is currently detained in jail. Investigations in the case are ongoing.

Categories: Trade Based Financial crimes News

Tags: China, Hong Kong, Investigations, Singapore, software, TBML