Hyderabad: In its final nail against the Hyderabad-based jeweller, Musaddilal Gems and Jewels Private Limited, which is currently embroiled in a Rs 111 crore demonetisation scam, the Enforcement Directorate (ED) has filed a prosecution complaint before the High Court.

The crime dates back to November 2016. The infamous demonetisation scam saw its lid gets blown off when approximately Rs 111 crore was deposited immediately after the announcement of demonetisation on 8 November 2016 by the firms owned by Kailash Gupta, Nitin Gupta and Nikhil Gupta.

What is the scam?

Hours after Prime Minister Narendra Modi announced demonetisation of Indian currency, the accused blatantly created around 5,911 fictitious sale invoices (bills) attributing fake (jewellery) sales. The fraud took place during the short relaxation period between 8 pm to 12 pm when a whopping amount of Rs 111 crore was deposited into their bank accounts.

A major part of the deposited black money belonged to the main accused, Mussadilal and his family members, and the remaining was solicited from others on a commission basis. They used a part of the amount to repay their loans, pay due taxes and used the remaining amount to buy gold (bullion). The investigation found that this gold was further sold at a very high rate to earn even more profits.

Based on this, the ED initiated a money laundering investigation against Musaddilal Gems and Jewels Private Limited, Vaishnavi Bullion Private Limited, Musaddilal Jewellers Private Limited and others on the basis of an FIR registered by the Telangana police.

The ED investigation revealed that the accused used demonetisation scheme to bleach their unaccounted black money into white money and also earn a windfall profit. The ED earlier attached movable and immovable properties worth Rs 130.57 crore which included jewellery worth Rs 86 crore, seized during the searches conducted by the ED.

Extensive investigation

The ED found that the main accused, Kailash Gupta, Nitin Gupta, Nikhil Gupta, and their firms along with their chartered accountants, the gold bullion dealers, and also the major contributors of the black money, were involved in the fraud. A total of 41 entities/individuals have been charged with the offence of money laundering, as they knowingly layered the amount into bank accounts of the Musadilal Group to claim the same as untainted money. Then converted the same into bullion which was further sold for profit.

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