Chargesheet filed in `5K-cr Surat fake diamonds & hawala case

The agency probed the case for four months and charged 79 people, including key accused Fatta and Madanlal Jain, under the Prevention of Money Laundering Act.

‘ED Ahmedabad files prosecution complaint in PMLA Special Court, Ahmedabad in the Rs 5,000 crore Surat fake diamond trade and hawala scam,’ the ED said on its recently launched twitter handle-- ‘dir_ed’. ‘In Surat fake diamond hawala scam Afroz Fatta & Madanlal Jain (both already in judicial custody) and 77 others charged with money laundering,’ the agency said on the social networking site.

The ED is also probing hawala dealings (transfer of money through illegal banking channels) in this particular case under the provisions of the Foreign Exchange Management Act (FEMA). The agency’s zonal office in Surat, in March, had claimed to have busted a hawala racket to the tune of Rs 700-crore during searches at the offices of some diamond traders in this city.

Sleuths had also questioned Fatta and trader Jain for their alleged involvement in the racket where it is suspected that Rs 700 crore was sent outside India. It suspects the total scam to be worth Rs 5,000 crore. The ED suspects that the people it is probing indulged in huge under-valuation of imported diamonds in order to send a large amount of foreign exchange outside the country without paying proper duties and taxes. 

The agency has alleged that instead of importing diamonds, the traders made bogus import bills claiming that they had purchased the diamonds from a foreign trader. Using the bills, the traders used to transfer money to overseas banks and financial intermediaries without ever importing any diamond, it claimed.