Police in Uttar Pradesh have made a significant breakthrough by arresting two individuals linked to a sprawling financial fraud network suspected of hawala transactions and Goods and Services Tax (GST) evasion amounting to approximately Rs 103 crore. The arrests were made from the Bhuta area of Bareilly.
How an Artisan's Tax Notice Exposed the Racket
The elaborate scheme unraveled when a zari artisan from Kesarpur village, Shabbu, received an income tax notice demanding nearly Rs 1.5 crore for transactions he claimed he had no knowledge of. According to police, the accused had approached Shabbu about a year ago and opened bank accounts in his name without his active involvement.
An investigation triggered by his complaint revealed a sophisticated operation. The accused had used Shabbu's personal details to create several fictitious firms, including Satya Saheb Traders and Mahakal Traders. Over the course of a year, these shell companies were used to route the massive sum of Rs 103 crore.
Modus Operandi: Targeting the Vulnerable
Police identified the arrested individuals as Shahid Ahmed (38) of Kesarpur village and Amit Gupta (38) of Kankar Tola. Their method was systematic and predatory. They allegedly targeted small traders and daily wage workers, obtaining their Aadhaar and PAN details to open bank accounts and register shell companies.
These accounts, known as "mule accounts," were then used to route large sums of money. During interrogation, Amit Gupta, described as the ringleader, confessed to preparing forged documents and opening such accounts in two banks under Shabbu's name. He admitted that signatures on the chequebooks had been pre-obtained.
Hawala Links and GST Evasion
Authorities suspect the network was not just moving money illegally but also actively evading tax. Several paper firms were used to generate fake bills to evade GST, pointing towards a possible hawala operation for converting black money into white.
SP (South) Anshika Verma stated, "The possibility of hawala transactions and converting black money into white cannot be ruled out. Mule accounts were opened in different banks in the names of shell companies. The account details of transactions made in the name of one company have been collected so far. Investigation is underway."
Police have registered an FIR under sections 318(4) (cheating), 338 (forgery of valuable security), 336(2) (forgery), and 340(2) (using forged documents) of the Bharatiya Nyaya Sanhita (BNS). They recovered Rs 3,000 in cash and mobile phones from the accused.
Ongoing Probe and a Larger Pattern
The two accused were produced in court and subsequently sent to jail. Police have indicated they will seek remand for further investigation to uncover the full extent of the network and identify other victims and accomplices.
This case echoes a larger pattern of similar fraud in the region. Notably, in November last year, the UP Special Investigation Team (SIT) busted a Rs 400-crore GST evasion racket operating through 144 shell companies. In that case, two accused from Moradabad had used documents of unemployed individuals to float firms linked to just two mobile numbers.
