CHENNAI: The Directorate of Revenue Intelligence (DRI) and Chennai Customs have unearthed a Rs 941-crore scam, in which six jewellers from Chennai had allegedly diverted around 2,170 kg of gold under the pretext of exporting gold jewellery to Dubai and Malaysia between 2020 and 2022.
Having registered as exporters, the jewellers procured thousands of kilogrammes of imported duty-free gold bars from RBI nominated agencies, such as banks and government bodies, under the agreement that they would be used for manufacturing gold jewellery for export.
However, only 10% of the gold was used to manufacture jewellery and the rest was diverted into the open market by allegedly selling it in black. Chennai Air Cargo Complex principal customs commissioner M Mathew Jolly, in his two detailed investigation reports in January 2023 and September 2024, alleged that the manufactured gold jewellery was mis-declared as 22 carat and exported with the collusion of a group of customs officers, who had accepted huge bribes for clearance.
Several jewellery manufacturers in Mumbai, Kolkata, Rajkot and Chennai were co-opted in this industrial-scale scam to both manufacture imitation gold jewellery and divert the pure gold bars illegally into the open market.
The investigation showed that the six exporters procured 2,507 kg of pure gold but used only 337.02 kg to manufacture jewellery and diverted 2,170 kg worth Rs 941 crore into the black market. Nearly 2,612 kg of imitation gold jewellery was exported fraudulently, the investigation alleged.
‘Customs officials took lakhs as bribe to clear consignment’
The investigation reports stated that this fraud had caused a massive loss to the government exchequer on account of customs duty and GST, and had violated several laws, including the Customs Act.
The probe also indicated a massive money laundering exercise as it details how cash was sent abroad through Hawala channels.
Besides the six jewellers, several manufacturers, a few customs officials, the logistics firm that handled the consignments, a top private sector bank and a major public sector government agency are in the dock because of this scam.
In January 2022, Chennai DRI officials busted the case when they inspected a Dubai-bound consignment declared as 22 carat gold jewellery at the Chennai Air Cargo complex. A gold assayer found them as imitation gold, made of 90% brass or copper. The jewellery was designed in a way that the X-ray spectrometer would give out a reading only based on the outer layer.
DRI later launched a series of searches at different locations including Mumbai, Kolkata and Rajkot to seize incriminating documents, digital records and gold bars procured from the nominated agencies. Investigators pored over hundreds of records of paper trails created by the scamsters to establish the modus operandi.
Further, the probe detailed the collusion of a group of customs officers, who were expertly trained to verify the authenticity of such consignments. It was found that the officers had accepted bribes from `3 lakh to `5 lakh per 10 kg of imitation gold for clearing the consignments.In fact, three customs officers cleared consignments even when they were not rostered and without the knowledge of the officers deputed on the particular shifts.
The customs and the DRI have also found fault with the RBI nominated agencies for supplying gold bars to the exporters, despite spot inspections showing that they did not have manufacturing facilities on their premises and were subletting it to manufacturers in far-away locations like Kolkata, Rajkot and Mumbai.
Part 2:Forged paper trails
The second part of the series will delve into how the scamsters created a fraudulent paper trail, including train tickets for the transportation of the gold bullion and the jewellery to and from the far-away manufacturers, which was busted by the DRI