The Hindu : New Delhi News : Two held for fraud

Online edition of India's National Newspaper
Thursday, Aug 19, 2004

New Delhi

New Delhi

Two held for fraud

By Our Staff Reporter

NEW DELHI, AUG. 18. The officers of Customs Special Intelligence and Investigation Branch (Air Cargo Export) have detected a case of fraudulent export to the tune of Rs. 108 crores by two merchant exporter firms and arrested two persons in this connection.

A statement issued by the Customs said in order to avail of undue export incentives, these firms -- M/s G & S International and A'S Raj International -- used to illegally procure foreign currency from the grey market and then deposited it in the Karol Bagh Branch of the United Western Bank Limited on the basis of forged Currency Declaration Certificates. Then the accused showed the deposits as export proceeds received from the tourist buyers.

Noting that the proprietor of M/s G & S International, Sita Ram Aggarwal, and a bank employee of M/s United Western Bank have been arrested, the release said Aggarwal's son and the proprietor of M/s A'S Raj International, Rajesh Aggarwal, is absconding along with a close associate and prime conspirator, Pramod Gupta, who was also involved in the fraudulent exports.

It was earlier this month that the Directorate of Revenue Intelligence had handed over the case to Customs for further investigation. When the Customs officers went to the Karol Bagh office of the exporter firms, to their surprise they found a number of forged Currency Declaration Certificates with duplicate numbers and stamps used for marking these certificates.

As on subsequent tallying with the originals it was established that the certificates were indeed fake, the Customs officials intensified their investigation.

It was then revealed that the remittance bank of these exporters, United Western bank Limited, had also committed gross irregularities while accepting the foreign currency on the basis of the forged certificated and thereby abetted the exporter in defrauding the Government exchequer in the form of Duty Entitlement Passbook Scheme (DEPB) and duty drawback incentives to the tune of Rs 10.28 crores.

The exporter had drawn money from the bank against bearer cheques purportedly issued to their suppliers. However, each bearer cheque was in a fictitious name and the money against these cheques was collected by the representative of the exporter only.

The bank had thus not only accepted the forged Currency Declaration Certificates but also disregarded the instructions issued on prevention of money laundering.

While Sita Ram Aggarwal was arrested around 10 days ago, the bank manager was arrested yesterday. A Customs official said both the accused have been sent to judicial custody. He said efforts are now on to trace the bank accounts of the accused so that they can be frozen.

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