Revenue Investigation Department to send largest hundi case for money laundering probeThe Department of Revenue Investigation has decided to send a case related to foreign exchange misappropriation of Rs4.16 billion through Hundi, an illegal money transfer system, to the Department of Money Laundering Investigation to see if defendants in the case had invested their illegal income for further gains.
The Department of Revenue Investigation has decided to send a case related to foreign exchange misappropriation of Rs4.16 billion through Hundi, an illegal money transfer system, to the Department of Money Laundering Investigation to see if defendants in the case had invested their illegal income for further gains.
On February 4, the Revenue Investigation Department filed a case at the Dhanusha District Court against eight people for misappropriating foreign currency through Hundi, which the DRI says is the largest ever Hundi case it has registered in court.
The department has named Rameshwor Purbe, Mina Devi Shah, Bijaya Yadav, Mokhtar Ahamad, Santosh Mahato, Naresh Mahato, Suraj Thakur and Pappu Kumar Das as defendants in the case. Among them, Naresh Mahato, Suraj Thakur and Pappu Kumar Das are Indian citizens.
“During our investigation, we have not found much property in the name of the accused in the country,” said DRI Director General Dirgha Raj Mainali. “We decided to send the case to the anti-money laundering department as there is a possibility that they have transferred their illegal earning to various countries because Hundi is a transnational transaction,” he added.
According to Mainali, the Money Laundering Investigation Department also has a good international coordination mechanism, enabling it to look into the matter properly. The Financial Action Task Force sets standards against money laundering and terrorism financing. Agencies like the Financial Intelligence Unit share intelligence on suspicious financial transactions with law enforcement agencies such as the anti-money laundering department.
According to Mainali, they suspect the accused to have transferred their illegal earnings to India as some of the accused are Indian citizens. The DRI had initiated an investigation by freezing their assets in the country.
Officials at the department also say that the Revenue Investigation Department had recently notified them about it. “We are waiting for the case from DRI,” said Jeevan Prakash Sitaula, director general of the department.
According to the department, the accused were engaged in Hundi business where they made payment of the remittance to the client's family here while settling the equivalent amount abroad.
This practice denied the country foreign currency which is vital for sustaining growing imports of goods and services. Remittance is the largest source of foreign exchange in the country but the tendency of settling remittance abroad could lead to a shortage of foreign exchange reserves in the country, officials said. Lately, there has been growing cooperation between these two agencies—both were brought under the Prime Minister’s Office last year.
Earlier, the DRI forwarded a case related to tax evasion to the anti-money laundering department to probe if the money earned through tax evasion has been invested to generate more wealth illegally. Based on the recommendation, the anti-money laundering department has been probing Binod Gupta, proprietor of Himalayan Cargo, who faces one of the largest cases of tax evasion, at the Kathmandu District Court.
On August 17 last year, the Revenue Investigation Department filed a case against Gupta and his wife Madhu Gupta, along with 20 other associates, on the charge of evading income tax and denying government revenue through fake Value Added Tax bills.