The Enforcement Directorate on Friday said that it has arrested businessman Muhammed Riyaz in its probe into a money laundering case to the tune of Rs 3,500 crore involving 57 shell companies.
An ED official said that Muhammed Riyaz aka Mohammed Sammy, the proprietor of Astral Exim and Co, was arrested for trade based money-laundering.
The ED has registered a case based on a CBI FIR for fraudulent high-value forex outward remittances/transactions exceeding Rs 3,500 crore using 57 shell entities current opened at a Syndicate Bank branch in Chennai.
The official said that during investigation it was found that Riyaz operated an array of accounts in the assumed names at various banks like Syndicate Bank, Ratnakar Bank Ltd, Karur Vysya Bank, ICICI Bank, etc.
The official said the modus operandi used by the hawala operator was to open the current account in the name of fictitious business entity at first instance, based on fabricated identity documents obtained by the individual.
“As a subsequent move, amounts were poured into the accounts operated in complete anonymity from various other accounts maintained on pan-India basis through electronic transfers. As the third and the final move, fabricated documents were submitted before the banks, made them to send the foreign exchange outside the country under the guise of advance payments against imports,” the official said.
The official said that during investigation of one shell entity conducted by the agency, it was found that the accused, acting in complete anonymity, integrated a sum of Rs 14.5 crore collected from various persons on a pan-India basis within a short span of two months.
“The entire operation was synchronised in such a way that the funds received were immediately transferred to various business entities in Hong Kong through wire transfer to the extent of $2,184,785.00 equivalent Rs 14.5 crore, based on fabricated documents.
“The details of various foreign exchange transfers in respect of other banks are also under probe,” he said.
The official said that the agency has recovered multiple identity documents from the residential premises of the individual including PAN cards, Driving Licences etc. in assumed names.
Riyaz was arrested and produced before a Special Court in Chennai and was remanded to judicial custody till July 18. The ED last year arrested three persons involved in the case.