The Directorate of Revenue Intelligence (DRI) has said gold smugglers in Kerala have illegally funnelled large sums of foreign currency to Dubai through the international airport here to physically repatriate a part of their sizeable profits to their foreign sponsors.
In court filings here last week, the DRI said a woman lawyer working for the network had carried large sums of foreign currency to Dubai several times in the past one year and illegally brought in up to 20 kg of gold in her handbag on return trips. She was now in judicial remand for smuggling.
Arrest of air passengers
The DRI’s investigation into the large scale illegal money transfer stemmed from the arrest of two air passengers last week on the charge of having attempted to smuggle 25 kg of gold in their hand baggage.
The DRI was probing whether any Customs official or airport insider had abetted the smuggling ring. It questioned at least three Customs officials for three consecutive days last week and raided their homes but was yet to record any arrest.
Investigators said the smugglers used the profits from the sale of contraband gold to illegally hoard foreign currency. They sourced it from loan sharks who invested their profits mostly in foreign currency to fend off any demonetisation in the future. The money lenders routinely catered to gold smugglers and travellers bound for gambling destinations abroad.
The smuggling ring had also used the informal but secretive hawala route to move money to Dubai. Investigators said that certain high-end hawala agents in North Kerala, who operated outside conventional financial channels, could move money across continents with just a WhatsApp message.
No trail left
Such transactions left no trail and were difficult to trace. The DRI and other Central agencies were also probing whether any banks had aided the gold smugglers by wiring the ill-gotten profits to Dubai electronically.
Banks had to report large wire transfers to foreign countries to the authorities concerned. Lack of compliance could invite legal action, officials said.