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Bank frauds, ponzi, govt funds swindling constitute half of ED’s money laundering cases: Data

Cases related to bank loan frauds, embezzlement of government funds and duping of investors through ponzi scams constitute almost half of the money laundering investigations taken up by the ED since it was empowered to investigate serious financial crimes about 16 years back.

Cases of corruption in the government and public sector come next as they form about 20 per cent of the total cases being investigated by the federal agency under the anti-money laundering law that stipulates rigorous imprisonment up to 7 years (not less than 3 years) to a convict. In cases where the money laundering charges are proven on the back of a narcotics trafficking crime, the maximum punishment can go up to 10 years.

The Enforcement Directorate (ED) was entrusted to enforce the stringent criminal sections of the Prevention of Money Laundering Act (PMLA), enacted in 2002, from July 1, 2005. The law empowers the agency to summon, arrest, attach the assets of the accused at the investigation stage and prosecute the offenders before a court of law.

As per the scheme of the PMLA, the ED requires registration of an FIR or chargesheet by a state police or any other law enforcement agency in order to consider it as a “predicate offence” before filing a criminal case and initiating investigation against the accused who in many cases are high-profile people including politicians, rich businessmen, corporate groups and bureaucrats.

As per data accessed by PTI, the ED between July 2005, to November 2021, registered a total of 4,637 money laundering cases (called enforcement case information report) out of which the maximum 1,024 or 22 per cent were related to offenses related to cheating, fraudulent deeds and disposition of property, forgery etc., followed by corruption in government agencies and public sector businesses at 927 cases or about 20 per cent of the total.

The agency also booked 769 money laundering cases (16.58 per cent) to investigate bank loan frauds, 297 cases (6.40 per cent) to probe ponzi or fraud depository schemes and 193 (4 per cent) cases were filed to investigate siphoning of government funds. A total of 590 or 12 per cent cases were filed by it to investigate drugs and narco-terrorism cases, the data said.

Overall, as per the data, apart from registering a total of 4,637 cases under the PMLA during the given time period, the ED filed a total of 907 chargesheets, issued 1,608 provisional attachment orders, got confirmed 1,265 of them (by the Adjudicating Authority of PMLA) and recorded the value of these attachments at Rs 96,868 crore.

The majority of money laundering cases, at about 49 per cent, registered by the ED since it began to probe money laundering cases pertain to offenses relating to bank loan frauds, cheating of depositors through ponzi crimes, siphoning of government funds and a variety of forgery and cheating cases, an analysis of the data shows.

Out of these major cases, the agency filed prosecution complaints or chargesheets in 175 cases out of the total 1,024 pertaining to cheating and fraud cases as it attached, froze or seized properties worth over Rs 17,452 crore.

Similarly, out of the total 927 cases of corruption it probed, the ED filed chargesheets in 222 cases and attached assets worth more than Rs 13,831 crore. In cases of bank frauds, it filed chargesheet in 144 out of 769 cases and went to attach assets worth over Rs 40,923 crore followed by filing chargesheets in 23 out of the 590 narcotics linked money laundering cases and presenting chargesheets in 74 out of the 297 cases it registered to probe ponzi or chit fund scam cases.

It also filed 63 chargesheets and attached assets of Rs 825 crore in cases linked to cases of fraudulent flushing of government funds.

The attachment in narcotics cases stood at Rs 152 crore while in ponzi cases it was over Rs 16,798 crore, the data said.

Apart from these cases, the agency also registered 87 ECIRs to probe money laundering angle in crimes linked to murder, grievous or bodily injury, kidnapping, extortion, stealing and robbery etc., and 147 money laundering cases were registered by it to probe offenses relating to fraud in currency and bank notes.

The ED also filed 131 cases after taking cognisance of offenses booked under the Unlawful Activities Prevention Act (UAPA) against individuals and associations and terrorist activities.

About 24 money laundering cases were filed by the ED, during the same time period, taking cognisance of the violation of the Sebi Act and offenses relating to use of manipulative and deceptive devices in trading, insider trading and substantial acquisition of securities or control.

The data said the ED also filed 30 PMLA cases over these years to probe offenses relating to emigration and passport violations (under the Emigration Act, Foreigners Act and Passport Act) apart from registering 41 cases to investigate offenses relating to evasion of duty or prohibitions imposed under the Customs Act.

The ED also booked 195 cases during this period where the “categorisation of the predicate offence is not evident (or to say miscellaneous offenses).” Another set of data said that the agency arrested 266 people under the PMLA for a period between financial year 2016-17 to 2021-22 (up to November, 2021). It said a total of 53,672 summons were issued and the agency conducted 2,616 raids during the same period. PTI NES RCJ

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