ED arrests seven middlemen, seizes Rs 93 lakh in new notes in Karnataka

The relative of a government official was also arrested

Unearthing a racket involved in an illegal conversion of demonetised notes, the Enforcement Directorate (ED) has arrested seven alleged middlemen and seized Rs 93 lakh in new currency in Karnataka as part of its money laundering probe.

Officials said that the agency placed the seven, including the relative of a government official, under arrest late Monday under provisions of the Prevention of Money Laundering Act (PMLA).

Rs 93 lakh in new notes of Rs 2000 have been seized in the case, they added.

Officials said the action was taken as part of a probe in a case where the Income Tax department had recently seized Rs 5.7 crore cash in new currency and the ED had booked a money laundering case against a government engineer and others based on a CBI FIR.

The modus operandi adopted by the alleged middlemen, officials said, was unearthed after ED officials launched a special operation and posed as 'customers'  themselves, looking to get old currency changed illegally, after paying commission to the said middlemen.

Officials said the probe by the agency found that these alleged middlemen were reportedly charging a commission between 15-35 per cent and were executing the racket of illegal conversion of new notes in alleged connivance with bank officials.

They said the agency suspects that there is a chain of middlemen involved in converting black funds into white. 

The accused are expected to be produced in a local court in Bengaluru for further custody.