ED files prosecution complaint in ₹60-crore demonetisation-linked money laundering case

The Directorate of Enforcement (ED) has filed a prosecution complaint before the Special PMLA Court in Ahmedabad against Maharshi Sanjaybhai Chokkas and several others for allegedly funnelling demonetised currency worth ₹60.52 crore into the banking system through fraudulently opened accounts and forged documentation.

According to the Surat sub-zonal office of the ED, the complaint was filed on November 27 following a detailed probe initiated under the Prevention of Money Laundering Act (PMLA). The investigation stemmed from an earlier case registered by the CBI, Gandhinagar, under the Prevention of Corruption Act, 1988, against Chokkas, Sunil R. Rupani and their associates.

Deposits made using forged identities and incomplete KYC

The agency alleges that Chokkas and Himanshu R Shah, in criminal conspiracy with others, deposited ₹36.17 crore in demonetised notes into a dormant bank account held in the name of Nirav & Co. The account, ED said, had been fraudulently activated using forged documents of proprietor Nirav R Shah who was unaware of the misuse of his identity.

Similarly, Chokkas and Sunil Rameshbhai Rupani allegedly deposited ₹24.35 crore in Specified Bank Notes (SBNs) into the account of S R Traders, a proprietorship firm of Rupani, opened with incomplete KYC documentation.

Together, the accused are alleged to have channelled ₹60.52 crore in demonetised currency into the financial system, thereby generating equivalent “proceeds of crime”, the ED stated.

Layering of funds through controlled entities

Investigators found that Chokkas and Himanshu R Shah subsequently moved the funds deposited in the Nirav & Co and S R Traders accounts into several entities controlled by them, including Shah Maganlal Gulabchand Choksi, Maharshi Traders and D N Traders.

The proceeds were allegedly used to purchase gold and silver bullion from multiple suppliers or to settle personal liabilities, effectively layering the tainted money.

The ED further stated that the accused created fictitious sales through their controlled entities by issuing invoices under ₹2 lakh — a threshold at which PAN disclosure is not mandatory — in the names of unknown individuals. This was done to project the laundered money as legitimate business income.

Property attachment and ongoing probe

During the investigation, the agency had earlier provisionally attached an immovable property worth ₹2.6 crore belonging to Chokkas under PMLA provisions.

The ED said that further investigation to trace additional assets and identify other potential beneficiaries is under way.