Major 'hawala' racket unearthed in Surat

The Enforcement Directorate today claimed to have unearthed money laundering (hawala) transactions to the tune of Rs 700 crore.
During a search at Surat-based offices of some diamond traders, ED officials came upon the racket and detained Afroz Fataa and Madanlal Jain.
"These two traders had registered two or three diamond trading firms with the Registrar of Companies. Then they opened accounts with three banks in Surat in December 2013," an ED official said.
Without actually importing diamonds, they allegedly made bogus import bills, and transfered money overseas using them. The money went outside India without a single diamond being imported, said the official.

"They submitted the bills to banks, which then transferred the money to foreign accounts. Within three months they sent Rs 700 crore. We are still finding out who were the recipients of the money."
A case has been registered under the Foreign Exchange Management Act.