Unexplained cash deposits by petrol pumps
Rajkot-based fuel station
Analysis of cash deposits data during demonetisation period revealed that there were over 110 petrol pumps under Rajkot charge, which had deposited cash of Rs 190 crore. On an average, it was found that one-fifth is the excess cash deposited in pumps over and above the sales made in the corresponding period. Demonetisation data was compared with average monthly sale of last year. The bank statements were also gone through for further analysis like periodicity and magnitude of cash receipts and payments. Cases, where deviations were observed beyond 25 per cent, were selected for survey, as the government had allowed petrol pumps to accept scrapped bank notes (SBN) against the sale during demonetisation. The exercise led to detection of discrepancies of more than Rs 10 crore in 9 surveys.
Phoney funds by bullion traders & jewellers
A Hyderabad story
Investigations were initiated on a Hyderabad-based group on receipt of information that Rs 97 crore cash had been deposited in demonetised currency notes. During investigations, the group claimed to have received cash from various customers on November 8, 2016 from 9 pm onwards towards advance for purchase of bullion. The irregularities found during search actions are as under:
It was claimed that cash advances of Rs 90 crore were taken on November 8 from 9 pm from 5,200 customers. Declaration letters were, however, furnished for only 65 people. It was also seen that cash receipts and sale invoices for these advances were for amounts below Rs 2 lakh and did not have PAN details.
Statement of the security guard on night duty was also recorded who stated that no one had visited the premises from 8 pm onwards on November 8, 2016. The premises was under CCTV surveillance, however no footage for November 8 was available, which the director claimed had been overwritten.
From the evidences prima facie the conclusion drawn was that the two companies had facilitated conversion of unaccounted cash of beneficiaries into bullion through making dubious claims of receipts of cash advance from 5,200 pople without any evidences. The case has been also referred to ED and CBI for appropriate action.
Inflated deposits by contractors, realtors
Bangalore-based contractors’ ways
Two major civil contractors of Bangalore who undertake state government civil contract works from irrigation and other departments, were alleged to have engaged in massive inflation of expenses and investment of unaccounted income in purchase of immovable properties. Discreet enquiries revealed that they were helping in conversion of unaccounted cash in SBNs held by others after November 8. Search revealed that money was transferred to related entities through the banking system and subsequently received back in cash. At one place, bank passbooks of 34 people were found. The managing director of the group company accepted that these accounts were used to generate cash and the accountholders were mere name-lenders. He also accepted several bank accounts were opened in the names of subcontractors, many of whom were relatives or friends of the directors. These bank accounts were used to withdraw cash for inadmissible and non-business expenses. A sum of Rs 1.96 crore in SBNs, belonging to the group, was also seized from the residence of a close friend of MD. The group also paid nearly Rs 1.3 crore in SBN to labours on November 8 and booked it as labour expenses. The search led to seizure of Rs 4 crore cash and valuables and admission of Rs 167 crore as undisclosed income.
Unexplained cash deposits by professionals
Hyderabad doctor’s art
The doctor was found to have deposited more than Rs 11 crore in SBNs after November 8 in three bank accounts. During questioning, the individual could not provide any document to substantiate the source of the deposits, which was later admitted as undisclosed income. Prohibitory orders were initially placed on the bank accounts, which were later lifted and a sum of Rs 7.50 crores were seized.
An account of Odisha official
A government employee was searched on the basis of information on unexplained cash deposits into the bank accounts maintained with various banks in own name as well as in the name of his family members. Investigations also revealed that his wife, a homemaker with no ascertainable sources of income, had purchased land in Bhubaneswar by making cash payment of Rs 53 lakh, the sources of which could not be explained. A total cash of Rs 2.28 crore has been seized in this case. The matter has also been referred to the state vigilance department.
Irregularities in co-op banks & societies
Cooperative bank at Alwar
Survey was conducted in the case based on a reference by the police on seizure of more than Rs 1.3 crore in cash from a vehicle carrying three directors of the bank. On investigations, it was found that the bank was used for conversion of personal unaccounted cash of Rs 2 crore by the chairman and his family. New notes were brought from the chest of SBI and SBBJ in the name of the cooperative bank and replaced illegally. It was also found the directors had cheated the bank of crore of rupees by fraudulently obtaining loans in the names of around 90 people, whose identities are doubtful.
Cooperative bank at Delhi
Search was conducted on the head office and branches of a cooperative bank in Delhi. The bank used demonetisation as an opportunity to earn illegal commissions for handling unexplained cash. The chairman and his associates systematically opened benami and fraudulent accounts to launder cash for beneficiaries. More than 1,200 new accounts were opened and 600 dormant accounts were made active after November 8 in the name of third persons or on the basis of fake IDs without KYC papers. Rs 120 crore was deposited in the bank.
Money put in the name of employees
Amritsar firm goes innovative
During survey, it was found that the entity had deposited Rs 2.5 crore in about 700 accounts of his employees. The company’s AGM (finance) admitted under oath to have deposited Rs 2.1 crore of old currency in 780 bank accounts of workers of the factory without their consent or knowledge. The cash so deposited was later withdrawn from the bank using the withdrawal slips already in custody of HR staff of the company. The actual bank accountholders were not aware that their accounts were being used for deposit of the cash of the company. The case has been referred to the enforcement directorate and the initiating officer under the Benami Act.
Chennai trusts show the way
Search operation was conducted on two trusts in Chennai, based on intelligence that chairman of the trusts had been distributing unaccounted money in SBNs to staff for purpose of conversion to new currency. Investigations revealed the trusts had planned to convert Rs 8.18 crore of unaccounted income held in cash through its 650 employees by depositing cash in the employees’ bank accounts in sums less than Rs 50,000. During interrogation, the chairman admitted the unaccounted cash belonging to trusts was kept in the lockers, which was distributed to employees after the announcement banning Rs 500 and Rs 1000 notes was made, to convert them into new currencies.
Bank accounts opened in name of paper firms
The tale of a Delhi shell firm
Investigations were initiated on the basis of information from the police following interception of a vehicle carrying Rs 3.7 crore in old currency. The carrier confessed to have deposited Rs 35 crore old denomination notes in bank since November 11. The bank accounts were opened in the name of paper firms. Cash was collected from various parties, deposited in bank account of one such fake firm, then transferred through RTGS from one company to another company’s account and after 3-4 layering, were finally deposited in the account of original owner. All these accounts were operated by a single person. This was done with active involvement of branch manager and operation manager in lieu of commission at the rate of 1% on the sums deposited. In this case deposits were made in the names of 3 paper firms. The bulk cash deposit was accepted by the bank based on declarations on respective letter heads of the proprietorship firms, conveying the respective cash deposits were out of cash sales. Several anomalies were found in such declarations including declarations of separate concerns written on common letter heads in similar font, style, type of paper. The signatures appeared to have been put by same person. The declarations didn’t had reference or PAN details.