Scamsters gold plate imitation jewels to hoodwink customs X-ray machines in Chennai

Colluding officers didn’t follow mandated step of scratching jewel surface before testing them
The investigation has found that the scamsters were able to hoodwink the machine by electroplating the top layer of the imitation jewellery with pure gold.
The investigation has found that the scamsters were able to hoodwink the machine by electroplating the top layer of the imitation jewellery with pure gold.Express illustration
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CHENNAI: The Directorate of Revenue Intelligence (DRI)’s investigation into the Rs 941 crore gold diversion scam has exposed the futility of X-ray spectrometer machines used by Chennai Customs and the methods followed by officers to detect imitation jewellery.

The investigation has found that the scamsters were able to hoodwink the machine by electroplating the top layer of the imitation jewellery with pure gold. Also, three colluding customs officers at the Chennai Air Cargo complex did not bother to scratch the surface of the jewels before subjecting them to the test which is a procedure mandated in their training guidelines.

According to the probe report of DRI and customs in September 2024 and January 2023, six Chennai-based jewellers procured duty-free imported gold bars from RBI-nominated agencies for manufacturing gold jewellery meant for export.

However, 90% of the gold, that is 2,170 kg of 2,507 kg gold procured, was diverted into the black market and 337.02 kg was sent to manufacturers in Kolkata, Mumbai, Rajkot and Chennai to make imitation jewellery.

This was then mis-declared as 22-carat jewellery at Chennai Air Cargo complex and exported to Dubai and Malaysia in connivance with a set of corrupt customs officers.

As per norms, customs cargo officers, posted as jewellery experts, have to scan such consignments through an XRF (X-ray fluorescence) machine linked to a computer which displays the purity figures.

The manual issued to officers by the Gem and Jewellery Export Promotion Council (GJEPC) says for optimum measurement, the surface should be clean, flat and polished.

It also asks officers to scratch the jewellery before the X-ray test in case of suspicion. Point 12 of the manual specifically states that if jewels are electroplated with pure gold, the machine would only measure the gold content of the layer.

During interrogation by DRI, all customs officers parroted that they acted as per procedure and that the XRF machine showed the jewellery to be genuine. They also said that they did not scratch the surface as it would damage the jewellery. In addition, three officers allegedly colluding with the jewellers also said that their superiors had given no intelligence or alert circulars about fake jewellery.

An Indian Revenue Service (IRS) officer told DRI that he would scratch the jewellery only if readings given by the machine were unusually low. Another officer told agency in December 2023, two years after the scam was uncovered, that the same method of checking through XRF machines was still being followed and that no instructions for scraping the jewellery had been prescribed. Meanwhile, Chennai Customs Air Cargo commissioner M Mathew Jolly did not respond to TNIE’s attempts seeking comment.

Customs sources said that uncovering this scam had raised questions about the purity of gold jewellery sold by smaller jewellers since the same XRF machines were being used there. However, Jayantilal Challani of the Jewellers and Diamond Traders Association in Chennai debunked the futility of the machine, stressing that the jewels have to be scratched by one micron (hair thickness) before testing for purity. “It is highly improbable that the machines did not work,” he said.

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