Mumbai: The Enforcement Directorate (ED), which is probing Ahmedabad-based trader Ritesh Shah for his role in Malegaon money laundering case, has found that Shah laundered money in the name of political donations.
The Central agency on Saturday obtained further custody of Shah for two more days after the agency said that it found about more firms which Shah was using to launder money.
The agency claimed that investigation revealed that the accused was working as an entry provider for giving cash in return of bank transfers for commission and was engaged in collection of cash in the name of donation to political parties to claim exemption of tax and return the said amount to the donors after deducting a certain percentage of commission.
Besides, the agency claimed that Shah was a part of a larger syndicate of money laundering. It revealed that within a span of few years, the accused along with his accomplices opened 200 such bank accounts illegally and withdrew crores of rupees.
“Shah was actively involved with a syndicate, which was using the identity documents of several unrelated persons to establish numerous shell entities in their name and later open bank accounts in the name of the said newly established shell entities, which were utilised to receive funds running into crores of rupees from various other bank accounts and were further used for routing of such funds through a maze of accounts,” the agency claimed.
The agency stated that Shah was arrested by Gujarat's GST department for allegedly evading taxes through 20 shell companies, involving transactions worth Rs 576.86 crore and causing a tax loss of Rs 108.28 crore.
Shah was detained by the Directorate General of GST (Ahmedabad) on December 22. Officials accused him of operating fake firms that generated bogus invoices to fraudulently claim Input Tax Credit (ITC). Investigations revealed that 20 supplier firms linked to him were non-existent.
ED had claimed that two firms – namely M/s Haresh Trading Co and M/s Hardik Enterprise – were used for layering funds. It was claimed that special APMC accounts were opened in the name of these two firms in Axis bank and these accounts were subsequently used for transfer of funds to 19 accounts in Nashik Merchant Co-operative Bank and Bank of Maharashtra.
