ED: Proceeds from sand mining used to pay excavator loans

This probe forms part of the agency’s dossier sent to the Director General of Police on June 14, sources said.
An earthmover used in illegal sand mining seized at Ponnampatti
An earthmover used in illegal sand mining seized at Ponnampatti | file photo

CHENNAI: The Enforcement Directorate (ED)’s investigation into the money trail of the alleged Rs 4,730 crore river sand mining scam has indicated that a portion of the cash from the sale of sand was routed through multiple accounts to one primary account, which was used for repaying monthly dues for loans taken to buy excavators.

ED had provisionally attached 209 of these machines worth Rs 128.34 crore in the case. These excavators were deployed for the illegal mining of sand, which ED has pegged at 23.6 lakh units in excess of what was permitted by the state government.

This probe forms part of the agency’s dossier sent to the Director General of Police on June 14, sources said.

In his deposition before ED, Asokan Muthaiya, engineer-in-chief of the water resources department, said the illegally mined excess sand is loaded on lorries and directly sold to people or companies without routing it through the government depot. This is a cash-based transaction that stays outside the WRD’s records.

As part of the probe, ED analysed several bank accounts of entities linked to S Ramachandran, K Rethinam, and P Karikalan, whom they alleged were controlling the sand mining business in TN. It was found that there were huge cash deposits made in their accounts or auxiliary accounts in many banks belonging to these entities. Despite attempts, all three were unavailable for comments.

These were then transferred through real time gross settlement or bank transfers to the primary account, through which the loans for buying excavators was settled through EMIs, sources said quoting the probe. Details of cash deposits to the tune of several crores made over a period of three years in the auxiliary accounts and the corresponding transfer into the primary account has been provided by ED in its probe report, sources said.

This entire laundering process was done to conceal the source of money illegally acquired through sand mining and layer it through several accounts, the probe said.

Based on statements of officials of companies that sold the excavators, ED has pegged the cost of each machine at around Rs 60 lakh. ED has given dates of the cash deposits of a few crores made along with details of accounts and the corresponding dates on which the EMIs were paid. It has also given information of at least 70 other accounts linked to these entities where suspicious cash deposits have been made, sources said.

The ED has alleged that this is the modus operandi through which the proceeds of crime have been laundered to clean the ‘dirty’ money.

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