Bullion dealer arrested for buying 285 kg gold post note ban

The Enforcement Directorate on Friday arrested CN Patel, director of Mumbai based Pushpak Bullions, for purchasing 285 kilo of gold worth Rs 84.5 crore with allegedly laundered funds post demonetisation in November-December 2016.

The funds were allegedly deposited into the accounts of Pihu Gold and Satnam Jewels, according to ED, post demonetisation.They were subsequently transferred to the account of Pushpak Bullions and used for the purchase of 285 kg gold.

Pushpak's account was already declared an NPA by the concerned bank. ED's preliminary investigation showed that the said companies did not have the economic wherewithal to engage in such a transaction in cash. The investigation has revealed Patel to be the mastermind in the alleged money laundering scam.

Sources explained that people holding black money used the same to buy gold, among other things, during demonetisation last year. Since they could not deposit huge quantities without questions being asked by banks, they were allegedly helped by some gold dealers to funnel funds into gold through shell company accounts.

The gold was then shown to have been sold to companies by the dealers, which authorities found to be bogus. In reality the gold was transferred to these people through the guise of such shell companies in exchange for funds deposited with the bullion dealers.