ED attaches ₹25.29 crore assets in Birfa IT case

The Enforcement Directorate has provisionally attached assets worth ₹25.29 crore in the Birfa IT case allegedly involving illegal transfer of foreign remittances worth ₹4,817 crore against bogus and forged invoices for making compensatory payments against under-invoiced imports from China and Hong Kong.

The attached assets including four immovable properties, four luxury cars and balances in the bank accounts are “beneficially owned by Manideep Mago and his family”.

The ED said it initiated investigation into the financial affairs of Birfa IT following an information that the entity had sold huge amount of crypto assets and encashed ₹1,858 crore from an Indian crypto-exchange.

“Enquiries revealed that it had not bought any crypto assets in India. Such a situation indicated a dangerous scenario of international ‘hawala’ using crypto transactions. Therefore, search under FEMA [Foreign Exchange Management Act] conducted in this case, revealed evidence that Manideep Mago has been making illegal foreign remittances using fake and forged documents,” it said.

Based on the findings, the ED lodged a complaint with the Delhi police Crime Branch and a First Information Report was registered. The Directorate then launch a probe into the alleged money laundering angle.

The agency found that an international ‘hawala’ syndicate was collecting cash from importers; and remitting the same to other countries against bogus invoices. Foreign outward remittances worth ₹4,817 crore were made to Canada and Hong Kong against such invoices raised on the pretext of leasing Graphics Processing Unit servers for crypto mining, educational software, lease of bare metal servers, etc.

In reality, as alleged, remittances were made to foreign companies controlled by Mr. Mago and his accomplices, who in turn made payments to Chinese companies engaged in the export of various products to India.

The agency had earlier searched the premises of nine Delhi-based importers in the same case. “Investigation has revealed one Delhi-based Dang family as a major beneficiary of these illegal remittances, which imported grossly undervalued goods from China for these importers and sent the compensatory payments through the mechanism devised by Manideep Mago and Sanjay Sethi,” the agency said, assing that four arrests have been made in the case so far.

The court concerned has taken cognisance of a prosecution complaint filed by the ED against the accused persons.