New Delhi, Sep 24 (IANS) : Investigations by the Enforcement Directorate (ED) have exposed a complex narco-terror funding network operating across India, revealing how drug proceeds are channelled through illicit hawala routes and invested in domestic businesses to finance cross-border terrorism, according to officials.
The battle against narcotics smuggling, particularly its links to terror financing, has emerged as a major priority for the Indian government.
Union Home Minister Amit Shah has said the Narendra Modi government would leave no stone unturned to make India drug-free and that the fight against the narcotics menace would now be intensified at the district level.
Several agencies, including state police forces, the Intelligence Bureau, Narcotics Control Bureau (NCB), Customs and the Enforcement Directorate (ED), are working to dismantle drug networks.
However, investigations by the ED have brought to light another dimension of the problem. Recent probes by the ED have revealed how money earned through narcotics trade is making its way in and out of the country. A shocking revelation that came out of the ED probe was that the money that has been coming in is being invested in legitimate ventures.
An official said that the kind of investments being made in India look legitimate until the trail of the funds is traced.
“The money that is generated from drug smuggling moves in multiple directions. A syndicate backed by the ISI (Inter-Services Intelligence) has its wings in Afghanistan, Pakistan and Dubai,” the official said.
The money first reaches Dubai, after which the hawala route is used to channelise the money into Pakistan, Afghanistan and India.
The money that reaches the ISI’s assets in Pakistan and Afghanistan is used entirely to fund terror activities against India, the official said.
Another official said that the money that reaches India through a hawala channel is meant to be parked until further orders. Those part of the syndicate in India are instructed to park the money in legitimate businesses.
Take the case of Gaurav Dawar, an accused in a heroin smuggling case. His arrest took place following major seizures in Delhi, Punjab and Haryana. This case came to light following the busting of a Rs 3,000 crore heroin smuggling case in Gujarat, in which one Harpreet Singh was named as the prime accused by the National Investigation Agency (NIA).
Investigations revealed that Dawar and Harpreet were reporting to one Vitaysh Koser alias Raju Dubai. Koser, according to the probe, was working on the instructions of ISI assets based out of Pakistan and Afghanistan.
Dawar and Harpreet were roped in by Koser to facilitate narcotics smuggling in India. They would regularly visit Dubai, where they would be paid in kind and also cash. The in-kind payments included cigarettes that are prohibited in India, dry dates, perfumes and betel nut consignments.
Officials say that these smugglers avoid routing cash through electronic bank transfers from across the border as it would immediately trigger the attention of the authorities. By exchanging high-value physical commodities, syndicates avoid the placement stage of money laundering completely eliminate the digital or paper trail.
Commodities such as cigarettes have a high demand and are lucrative due to big differences in global tax rates. Smugglers exploit bootlegging to clear massive profits with less risk when compared to moving narcotics. Perfumes and dried dates are compact and have high demand, carrying premium street value.
An Intelligence Bureau official said that these are relatively safer payments that are made to those indulging in the narcotics trade in India.
“Instead of cash, they are paid in kind to avoid alerting the agencies,” the official said.
The ED probe also found that Dawar had made investments in two Delhi nightclubs, Playboy Club and White Club, that were being operated through an entity called Newera Feast and Hospitality Pvt. Ltd.
An official explained that such clubs are used to fabricate ghost customers. Launderers inject illicit cash into the daily earnings registry. They also create fake bookings, dummy restaurant orders, and then mix dirty money with legitimate daily sales. Further, such clubs or bars are also used to sell cigarettes and perfumes at retail margins. This is then turned into legal business cash.
It has also been found that such hospitality businesses fund terror indirectly. Goods such as kitchen equipment, imported linens, and specialised food are purchased from an overseas shell company that is controlled by a terror network.
They overpay these companies and accept fake invoices for these goods. What looks like a normal trade operation is actually an indirect way of terror funding through these overseas shell companies that are controlled by terror groups, an official said.
