- The multi-crore Saradha Ponzi scam has recently revealed a Singapore connection. The Saradha group is thought to have collected approximately INR 200–300 billion from over 17 lakh investors before its collapse in April 2013. In the course of investigation, the CBI has found documents that connect the scam to Singapore; as many as 6 trusts based there could be responsible for siphoning off money (Source – Times of India)
- The money trail has led to several off shore locations including west Asian locations, locations in the Middle East as well as locales as far afield as South Africa according to some estimates. The Jebel Ali Free Zone in Dubai is known to offer several tax benefits to investors and it is believed that Saradha chief Sudipta Sen has utilised this free zone in the same manner as many other Indian businesses. (Source – Telegraph India)
- There are several locations that are utilised by Indians because they offer safe harbours for money – which Indians either want to hide or don’t want to pay tax for. Several of these tax havens have in common the fact that they used to be British colonies and today run on the twin industries of banking and tourism. These include locations such as the Cayman Islands, the Bahamas, Bermuda and so on. Other popular options include Jersey, Luxembourg, the Seychelles, Marshall Islands and of course Switzerland. (Source – Economic Times).
- Switzerland, with its Swiss Banks so famous for their dedication to protecting investor privacy is among the most popular destination for people from all over the world who are looking to stash secret or ill-gotten wealth. The story of Hassan Ali Khan, who is thought to be a conduit for laundering money for industrialists and politicians is case in point. His disclosed annual income was that of Rs 30 lakh but his Swiss account in UBS Zurich had $8 billion parked there. (Source – India Today)
- It isn’t just off shore locations that are helping the shady dealers either stash or launder their money. Indian urban cooperative banks also are guilty of shielding and promoting these illegal dealings. The RBI ordered closure of as many as six urban cooperative banks which came under the scanner for laundering money or rerouting illegal wealth. (Source – NDTV profit)
- Indian investigative agencies have frequently called upon Swiss banks to reveal information about Indians who have illegally parked their funds in their institutions but are typically met with resistance. Now however with the Swiss financial institutions committing to help India fight against black money, not only identities but also the technique of layering is coming to fore. Gold and diamond trade as well as stock market transactions and fund transferring via virtual currencies such as bitcoin has made it difficult to trace money trails and their real beneficiaries.
- And what about wealth that is available in India itself. What about scamsters, criminals and tax evaders who conveniently transform their money into gold and diamonds and stash these secretly and effortlessly right here in India? What about the opaque property transactions that are conducted largely in cash; often benami transactions? What about the very significant grey market in the country? The Swiss may or may not enlighten us; we can be a 100% sure that Indians hiding money in India most certainly won’t.
Image source – sakalmoney.com