ED registers FEMA case in Kolkata hawala raid haul

KOLKATA/NEW DELHI: ED has registered a case to probe alleged hawala operations behind the over Rs 45 crore cash which was seized in Kolkata as part of a crackdown against lottery operatives channelling illegal funds for the Dawood Ibrahim gang.

The agency, sources said, registered a case under the Foreign Exchange Management Act (FEMA) after it got leads that the racket had spread its tentacles to foreign shores in Europe, Middle-East and Nepal and a few other countries.

The agency will issue summons to various entities involved, including the two suspected lottery kingpins identified during the searches conducted by the Income Tax Department last week in the West Bengal capital.

Sources said that Enforcement Directorate (ED) officials in Kolkata had earlier met IT department sleuths and it was decided to further probe the case under FEMA, a law used to investigate hawala dealings that entail skirting official banking channels to route and transfer large funds.

The case pertains to the Income Tax department seizing over Rs 45 crore cash, which was found stashed in gunny bags and almirahs, in Kolkata and adjoining areas as part of a crackdown against lottery and hawala dealers.

The operation was initiated following inputs by the Intelligence Bureau about an alleged fake lottery racket which has its reach extending up to Tamil Nadu.

Two firms, identified as G Systems and FP Enterprises, are under the scanner of the agencies.

"It is suspected that these firms were involved in running a fake lottery racket, the criminal proceeds of which were being sent to Dubai to fund the illegal activities of global terrorist Dawood Ibrahim," sources had said.

Sources said the entire racket could be worth about Rs 1,000 crore.

"The agencies are probing if this stash was being ploughed into money laundering activities too," they said.