Income-Tax scans were done on at least three multistate co-operative credit societies from Maharashtra, India. The three societies are under investigation for the alleged laundering of approximately Rs 1,390 crore ($21.6 million USD) of unaccounted money through various banking routes between November 2014 and April 2016.
The societies being investigated by the I-T department have purportedly received money in their bank accounts through unidentified individuals and entities via cash deposits from over 4,000 Real Time Gross Settlement (RTGS) system transactions. These transactions were performed in increments of Rs 1 crore to Rs 5 crore ($10 million to $50 Million USD) per day and separated into smaller amounts before allegedly being transferred to the beneficiaries through a web of shell companies.
In order to maintain the anonymity of cash depositors under the scrutiny of regulators and enforcement agencies, the societies deliberately failed to record basic KYC (Know-Your-Customer) details and, apparently, gave distinct account memberships to the cash depositors which allowed them to channel the unaccounted cash.
Shri Venkatesh is being accused of possible dual deposits of Rs 285 crore ($4,417,500 USD) and Rs 185 crore ($2,867,500 USD) from a renter of a hotel and a merchant in Mumbai. The income deposits were taken out of beneficiaries by a network of shell companies maintaining Real Time Gross Settlement (RTGS) system.
Shri Venkatesh announced that all KYC documents from customers were given to the I-T department, allowing open access to all documents for auditing and checking, and claims that when the I-T department performed the survey there were no negative remarks or allegations stated.
According to recent information, India is incredibly vulnerable to money laundering compared to other countries. Almost $343 billion has been laundered out of India between 2002-2011. India’s high risk status proves that the government must make AML a priority.