MUMBAI: In one of the biggest cases of money laundering using trusts registered in offshore tax havens, the Enforcement Directorate has arrested the Mumbai-based director of Zoom Developers Pvt Ltd, Vijay Choudhary, for allegedly swindling public sector banks in India of over Rs 2,650 crore.
Since the fraud came to light, the agency has attached 1,280 acres of land in California, US, and some other assets of Choudhary and his family members abroad, together worth about Rs 130 crore.
Choudhary had two trusts registered in Liechtenstein — Beverin Stifung Foundation and Windleaf Foundation, of which he was the sole beneficiary. Using these trusts, he further created five companies in UK and Switzerland which were projected to the Indian bankers as independent foreign entities that entered into contracts with Zoom Developers for various engineering services. According to ED, its investigation revealed Choudhary had a chain of at least 450 companies, many of them registered in several offshore jurisdictions, including the US, UK, Switzerland, Singapore, Germany and Dubai to launder proceeds of his crime, the money he earned swindling government banks in India.
Through these foreign companies, Choudhary generated fake work contracts and obtained bank guarantees in India on the basis of these contracts and advance received from them. These foreign entities with their foreign bankers later invoked these bank guarantees and recovered the money pledged as guarantee when the Indian companies failed to deliver. Both the Indian companies and the foreign entities were allegedly controlled by Choudhary and his associates, the ED has said. An ED spokesperson said Vijay Choudhary had floated 15 companies in US, nine in Dubai, seven in Singapore, four in Germany , three each in UK and Switzerland and two each in China and Zimbabwe to create fake contracts and launder money .
Choudhary and his Zoom Developers are facing a CBI case too for cheating government banks. A chargesheet has already been filed by the CBI in this case for causing “wrongful loss to five banks to the tune of Rs 966 crore.”Punjab National Bank, Syndicate Bank, Canara Bank, United Bank of India and Union Bank of India are those affected, according to the CBI chargesheet. But ED claims Choudhary had cheated at least 25 banks in the same way, causing a loss of Rs 2,650 crore.
Bureau Report
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