'fake Rs 10 Shares Sold For Rs 25,000': Ex-ed Chief Breaks Down Money Laundering Methods

Former Enforcement Directorate (ED) Director Karnal Singh has outlined really criminals and corrupt politicians launder achromatic money successful India - and really some, moreover aft being jailed, person gone connected to go ministers. "One of nan astir communal ways group launder money is done nan banking sector," Singh explained successful a podcast speech pinch Raj Shamani. 
 
"Funds are invested successful existent property aliases routed overseas utilizing hawala channels. Then there's trade-based money laundering - utilizing over-invoicing aliases under-invoicing to move ample sums retired of nan country. Within India, group put successful properties nether benami names, aliases group up industries nether personification else's identity."

He elaborate really forbidden money is turned white: "Let's opportunity personification has proceeds of crime. They return a slope loan, commencement a business, and inject achromatic money into it done clone invoices. The business whitethorn not moreover beryllium operational, but they show revenue. Now that money appears legitimate."

He recounted really a leader successful Maharashtra ran a web of 300-400 ammunition companies to launder rate from corruption. "He sent rate into these ammunition firms successful tranches of Rs 45,000 - conscionable beneath nan Rs 50,000 period that triggers reporting to nan Financial Intelligence Unit. These were past routed done layers of slope accounts and yet reinvested successful his ain company. He sold Rs 10 shares for Rs 25,000, past bought them backmost later astatine Rs 2. Money returned, shares returned."

Singh, who served arsenic ED main from 2015 to 2018, clarified that not each ammunition companies are illegal: "You whitethorn unfastened a ammunition patient to negociate pre-launch costs of a early business. But erstwhile there's nary existent activity happening — only rate transactions — that’s wherever suspicion starts."

He added: "Some of these group were caught and jailed, but moreover aft that, they became ministers again."

Singh recalled a 1999 lawsuit involving Rajan Tiwari, a statement slayer who murdered a Bihar curate wrong a hospital. "I was successful nan Crime Branch then. We traced him. Years later, successful 2017, I was testifying successful tribunal and realised he was sitting down me. He said, ‘Sir, you trapped me.’ That man had go a minister. The problem is, unless there's a conviction, specified group tin still title elections. Voters don't ever look to attraction whether a campaigner is simply a criminal aliases not."

Asked astir nan astir imaginative laundering cognition he'd seen, Singh pointed to nan Bank of Baroda case, wherever Rs 3,600 crore was sent overseas nether nan pretext of beforehand payments for imports that ne'er arrived. Thirteen accounts were used. When we traced them, we recovered nan board were slum residents paid Rs 10,000 a month. After KYCs were completed, offices were shut. Money was over-invoiced for exports. Someone would unfastened a overseas company, nonstop over-invoiced goods, and bring backmost inflated amounts, taking advantage of nan government's work drawback scheme."

In different lawsuit from Mumbai, Singh described really a institution applied for a Rs 6,000 crore indebtedness for importing diamonds, past diverted nan funds. "They opened a institution successful Dubai pinch a section partner. The promoter fled, leaving his servants listed arsenic board backmost successful India. He yet took up a caller citizenship."

Published on: Jul 13, 2025 12:47 PM IST