Surat-based financier in ED net, Rs 1 cr in new notes seized

What was recovered from Bhajiawala: Rs 1.45 crore cash, of which about Rs 1.05 crore was in new currency notes, bullion worth Rs 1.49 crore, gold jewellery valued at Rs 4.92 crore, other ornaments worth Rs 1.39 crore and silver ingots priced at Rs 1.28 crore.

The Enforcement Directorate on Friday said it has arrested the son of Surat-based financier Kishore Bhajiawala on money-laundering charges and for allegedly using 1,000 fake IDs to illegally convert Rs 1 crore in old notes into new post demonetisation.

The agency said it has placed "Jignesh Kishorebhai Bhajiawala (41) under arrest as per provisions of the Prevention of Money Laundering Act at about 11.45 pm last night" at is sub-zonal office in Surat.

The Enforcement Directorate had registered a criminal FIR against Kishore Bhajiawala and some of his family members based on a Central Bureau of Investigation FIR against him, which was booked after the income-tax department first conducted searches and seized gold and cash from his premises as part of their operation in December last year to check black money post the notes ban.

The case had gained prominence after investigating agencies detected the proverbial rags-to-riches ascent of the 'chaiwala'-turned-financier based in the diamond city of Gujarat.

"The Bhajiawala family has converted a huge amount of their unaccounted money, post demonetisation, into new high denomination currency and other valuables through collusion with bank officials and private persons by impersonating, forgery and by using forged documents.

"An amount of over Rs 1.02 crore in new currency was seized by the I-T department from his premises during searches at his home, shop and bank lockers held by them. It was also found that the accused had hired several bank lockers in benami names to stash their unaccounted assets," the ED has alleged.

Describing the alleged modus operandi deployed by Bhajiawala family to generate and stash black money, ED said, "Bhajiawala family in collusion with P Bhatt, the then senior manager, Surat Peoples Cooperative Bank Limited, Udhna branch in Surat obtained KYC files and these files were taken outside the bank to several xerox centres to obtain photocopies of IDs available in the said files."

"This way Bhajiawala family collected more than 1,000 IDs. Around 200 of these IDs were used to obtain new currency in lieu of old currency of Rs 1,000/500 from the said bank," it said.

The agency added that "it is believed that Bhajiawala family has used the remaining IDs to obtain new currency through collusion, impersonation and forgery and laundered the same.

"Possibility of Bhajiawala family collecting IDs from other financial institutions and their misuse cannot be ruled out as the probe is ongoing," it added.

I-T sleuths had recovered Rs 1.45 crore cash, with about Rs 1.05 crore in new currency notes, bullion worth Rs 1.49 crore, gold jewellery valued at Rs 4.92 crore, other ornaments worth Rs 1.39 crore and silver ingots priced at Rs 1.28 crore. The total assets of Bhajiawala family detected by the IT were about Rs 10.50 crore.