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OPERATION RED SPIDER, PART- 4 COBRAPOST EXPOSE, FORIEGN BANKS INVOLVED IN MONEY LAUNDERING

COBRAPOST EXPOSE, FORIEGN BANKS INVOLVED IN MONEY LAUNDERING

COBRAPOST EXPOSE, FORIEGN BANKS INVOLVED IN MONEY LAUNDERING


Cobrapost - January 7, 2014

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Foreign Banks
R Saxena, Wealth Advisor, Standard Chartered Bank, GK 1, New Delhi
THE BANKER DECIDES TO ERR ON THE SIDE OF CAUTION, THOUGH HE IS ONLY TOO WILLING TO ACCOMMODATE THE CLIENT AND HIS UNACCOUNTED MONEY. LOCKERS FOR CASH IS ALSO NOT A PROBLEM
Entering the branch, the Cobrapost reporter details his purpose to an official at a desk – Rs 50 lakh investible in the long term. We are directed towards the Wealth Advisor R Saxena.
We repeat our objective: Around Rs 50 lakh to be invested in three names. The money belongs to a politician who does not want to reveal his identity. He is making the investment on his wife’s name, the reporter’s wife’s name and the reporter’s name. There should be no TDS, and the amount is in cash. Plus, secrecy is paramount.
We tell Saxena that we will introduce him to the politician. The politician needs to understand the scheme before giving his nod. Saxena says he has several schemes to discuss.
We let the cat out the bag: The basic purpose of the investment is to launder the black money. Saxena is helpful: “Main aapko bata doonga kaise… jo bhi agar koi risk hai… I will let you know… clarity karke bata doonga… jaisi need aap bata rahe hai… we will try to match that ki wo product need ko suffice kare… uske bad jaise aapko comfortable lage we can take a call on it. (I will tell you how… if there is a risk, I will let you know clearly … We will try to match the product we offer with your need. Then, whatever you are comfortable… we can take a call on it).”
He also assures us that he will bring along his insurance man, Manoj. Will there be a senior person as well at the meeting? “Main BM ko bhi bol doonga… (I will also tell the branch manager).”
But everything is to be kept confidential. Saxena says: “We maintain secrecy… we maintain confidentiality… that’s part of our job… koi poochega bhi to hum batate nahi… (We maintain secrecy…we maintain confidentiality… that’s part of our job. We will not tell even if someone asks).”
Will the investment be made through an account? Saxena says: “Account ke through hi hota hai… (It is done through accounts).” Saxena says that they only accept cheques for investment. We tell him we will route the money as soon as they issue us the cheque books.
We now ask for big lockers to put in about Rs 5-7 crore cash later. Saxena says: “Locker hai… mein availability check kara deta hu… (We have the lockers … I will check availability for you).”
We ask for a clarification – Is routing the money through accounts safe? “Bilkul… woh to hamara kaam hi hai… we do it on a daily basis… safe hoga… (Sure… that’s our job.. we do it on a daily basis… it will be safe…)” he assures us.
So does he have other politicians as clients? “Hain sir… matlab aap aise jitna keh rahe ho utna nahi hai… usko thoda sa issue hota hai ki bank bhi thoda sa safeguard le ke chalta hai… keeping the customers safety… so we will have a large… so that you don’t get into trouble in future… bank will do that due diligence from their end… kuch issue hua toh we will not do it only… pehle hi bata deenge aap mat kariye…hum khud hi mana kar deenge… hamare bhi checks hote hai… as a employee main hi mana kar doonga aapko… (We have sir, but with amounts you are telling us… the issue is bank also safeguards the safety of the customers, so you don’t get into trouble in the future. The bank will do its due diligence from its end. If there is some issue then we will not do it. We will warn you… that don’t do it. We too have our checks… as an employee, I will myself say no to you).”
The meeting ends with an assurance from the bankers that they will come to meet the politician whenever he gives an appointment and discuss the plans with him.
Imp quotes…
“Main aapko bata doonga kaise… jo bhi agar koi risk hai… I will let you know… clarity karke bata doonga… jaisi need aap bata rahe hai… we will try to match that ki wo product need ko suffice kare… uske bad jaise aapko comfortable lage we can take a call on it.”

(On routing cash through accounts)
“Bilkul… woh to hamara kaam hi hai… we do it on a daily basis… safe hoga…”

Dinesh Kumar, Service manager, Standard Chartered Bank
The undercover reporter of Cobrapost meets Dinesh kumar, service manager, Standard Chartered bank, as soon as he enters the branch. Upon hearing that the client wants to talk about long term investment, Dinesh takes him to his seat and asks him to wait. When Dinesh returns, the reporter tells him that he has come on behalf of a minister. Dinesh becomes inquisitive about the identity of the fictitious minister. “Kaunse mantri hai? (Which minister is it?)” he wants to know. When the reporter dodges the question he insists, “Nahi nahi naam toh batao (No NO, tell the name).” The reporter is still unwilling so he brags about his clientele, “…main bataun mantriji toh yaha bahut saare aate hain…aisi koi baat nahi hai… (Let me tell you, a lot of ministers come here. There’s no problem as such).” He then takes the names of some important ministers. Do they all have accounts and deposits here, asks the reporter? Yes of course. In fact the bank has a priority segment for them: “…hum priority banking ek segment hai unhi ke liye hai… (There’s a segment called the priority banking. We are for that),” That’s good! We also have a ‘small’ amount of Rs 10 crore to start with and Rs 25-30 crore is to follow. Dinesh prefers clear talks and he has his logic.
The banker again wants to know the name of the minister and when the reporter avoids his question, he says: “…dekho agar aap doctor ke paas jaoge na aur apni bimari khul ke nahi bataooge na to ilaaz thik nahi hoga… (Look, if you go to a doctor and don’t talk about your ailment openly, then the treatment will not be right).” The manager prods the reporter to open up completely.
The ‘doctor’ of the black money continues, “…main wahi bataa raha hoon aisa hai aap bataa rahe hai na hume main aapko clearly bataa deta hoon saare mantri wantri sab hai aur sab jitne [hain na sab paisa… sab lagaate hai paisa ghumate hain aisi koi baat nahi hai… That’s what I am telling. Let me tell you clearly, [we have] all these ministers who invest all their money, and rotate their money. It is not a problem).”
Observing that the client is on the verge of opening up, Dinesh instills more confidence, “…yahaan sab hai sab hai (All are here. All of them).”
Will he invest in plans which will yield good and guaranteed returns? Not to worry as the black money will be dealt by solid professionals. He says, “…wo bhi kara denge aur main aapko communicate kar deta hoon mantriji ko bol do yaha pe sab thos bande baithe hain… (Will get that done and you may communicate to the minister that we have reliable guys here).”
That’s alright but how will he convert the black money into white? That’s not a big deal. He says, “…white karne me kya ho gaya account khol ke convert kar denge paisa transfer karo…aapke paas tarike hote hai…abhi chalo baat bhi hone do… (What’s there in converting [the money] into white, will convert the money after opening the account. Transfer your money. You have ways. Well, for now, let’s just talk).” We want him to explain the method to our satisfaction. He continues, “…chaar account me paisa transfer kar do white me kya dikkat hai…hum to apne paas hi kholenge… (Transfer the money in four accounts. What’s the problem in [converting the money to] white, we’ll open it ourselves).”
Are the seniors aware of such dealings? Certainly. Dinesh promises to bring his regional manager to the meeting with the fictitious politician. He claims that the slush funds will be safe with the bank as he can manage it from anywhere in the country.
We need lockers to stash the cash. “…kitne chahiye bolo…bada dila doon? (How many do you want? Should I get you a big one?),” he offers. Yes, we need big lockers. “…locker jitna chahiye bada utna dila deta hoon aur 24 ghante waala dilata hoon… (I’ll get you whatever the size of locker that you ask for. And, I’ll get you the one that can be accessed 24 hours),” he says. “…Thoos do jisme jaise… (Stash it in)”is the advice when we ask for the counting machine to count cash. The cash just needs to be packed and stashed: “…locker me aisa hota hai locker me ginti nahi hoti kabhi locker me ye hota hai ki aap baandh laao…ek chabhi aap lagaoge aur doosra lagayega bank… (What happens in a locker is that there is no counting. You get the bundle. You put one key and the bank will put the other one).” So how many politicians have stashed cash in that way? “Main bata raha hoon aise account toh bahuto ke hain… (I am telling you, a lot of them have accounts [here]),” he claims.
We want to send the cash, stashed in the lockers, to accounts in foreign countries. “…dekho jo paisa hota hai aap bhej sakte ho lekin usme limit hoti hai… (Look, you can send the money… But, it has a limit to it).” He informs. And what is the limit? “…agar aap kisi ko gift bhej rahe ho bahar aap gift ke naam par bhej sakte ho par gift me hota hai 2 lakh… ( If you are sending a gift then you can send it as a gift abroad but, the gift can be up to Rs 2 lakh),” he says. So we can send up to USD 2 lakh per annum by declaring it as gift. That’s convenient!
Tell us more about the deals of ministers, the reporter probes. “….main ab ye cheese to bolunga nahi main aapko khol khol ke dikha to sakta nahi… (Now I can’t tell you all these things. I cannot open [the records] and show them to you),” says a now cautious Dinesh. He says that he would talk more when we meet next. Before parting, he reassures us that we needn’t worry about detection by the tax authorities.
Amarjeet Singh, Wealth Manager, HSBC
The undercover reporter of cobrapost walks into the HSBC bank in Noida .He looks for someone with whom he can talk about making long term investments. He is asked to take a seat and within moments Amarjeet Singh, Wealth Manager, HSBC shows up. He invites the reporter to his cabin. The reporter tells him that he intends to invest Rs.50-60 lakh in some plans where he can save tax and where the investment will not be show in the books. He also tells him upfront that the money belongs to a politician. “…to aap jo deposit karoge wo cheque se karoge ki kaise karoge? (So the [amount] that you will deposit, will it be done through cheque or how do you plan to do it)?” is the manager’s query. We have cash.
The manager understands the requirements of such deals. He states, “…accha to PAN card bhi nahi daaloge aap (Ok. So you will not give the PAN card as well)”. That will be best for us, we say. Then we will have to do it in small amounts. The manager suggests, “….accha ok toh in that case fir to aap thoda thoda amount karke hi deposit kar paaoge issme (OK. In that case you will be able to deposit in small amounts only).” We will go by the manager’s advice if he wants us to open accounts. He says, “haan account ke through hi jyaada thik rahega (It will be better if it’s done through account).” Yes. Then we will open 3-4 accounts.
The deal has to be kept strictly confidential. Singh assures, “…nahi sir wo jo aapka privacy factor hota hai uski koi dikkat nahi hai but ye hai ki main apko guide karoonga ki kaise karna hai (No Sir, there’s no problem with the privacy factor, but I shall guide you as to how it should be done).” The reporter insists that the banker should only follow the route which he has taken before. What is the best place to put in cash? Is it an insurance plan, he asks. “Hum aapka initially jo tax saving k liye who toh insurance hoga, agar aap long term k liye TDS bachaane k liye toh who mutual funds me bhi kara sakte ho (Initially, for the purpose of saving tax, we will go for insurance. If you want to invest in long term and avoid TDS, then it can be done through mutual funds).” confirms the manager. He further assures us that the returns will be issued in white.
Can we buy gold from the bank? No, the bank does not sell gold but the eager wealth manager will get it done. “… Nahi bank se nahi hoga lekin aap agar cash se lena chahte ho to aap bank se hi le sakte ho. Matlab main paas me jis bank se hoga uss bank se organize kara doonga (No, it will not be done in the bank, but if you want to buy it using cash, then you can buy it from the bank itself. As in, I can get it organized at the nearest bank),” offers Singh. He suggests buying gold in multiple names, “…multiple naam se jaise aap apne naam pe to loge nahi” ([Buy] in multiple names for you won’t buy it in your name).”
Can we get lockers to stash the cash? Singh says that lockers will be made available in the barakhamba branch even if we have accounts in his branch. That’s alright with us but won’t we have any problems if we put cash in lockers? “…nahi nahi locker to aapka personal hota hai na (No No. Locker is personal),”comes the assurance.
Amarjeet wants Rs 1.5 lakh in cash to be deposited initially to open accounts. We readily agree. He is worried about the inconvenience we might faceas we will need to come again for that. He says apologetically, “cashdeposit ke liye aapko thode time baad aana parega… (For depositing cash, you will have to come after some time).”
We have no problems with the inconvenience but Amarjeet Singh should use only those methods which he has tested in the past. He reassures, “Aap chinta mat kariye .main tried and tested cheez hi bataunga jitna matlab logical hoga. Aap multiple 3-4 jagah pe account khulwa lo… agar safety issue hai… (You don’t worry. I will suggest a tried and tested method, something that is logical. You can open multiple accounts in three or four places, that is, if you have safety issues).”
Is it possible to send money abroad? Yes, it will be remitted through the account, tells the banker and takes responsibility of getting it done.
The meeting ends with a promise to involve the branch manager at the next step of the deal.
Sonam Soni, Vice –president, HSBC, Shobhit Garg, Assistant Vice –president, HSBC
The undercover reporter of Cobrapost seeks permission of Sonam Soni, Vice-president, HSBC, before entering her cabin. He tells her that he needs to talk about some long term investments.
Does he have accounts with their bank? The banker wants to know. Not yet, the reporter tells her, but we need to open accounts in the name of the wife of a politician and two others. So what is the purpose of opening the accounts? To make long term investments in some plans, except fixed deposits.
Enter Shobhit Garg, assistant Vice-president, HSBC. Soni briefs Shobhit with the requirements of the client. “…jisme interest earning pe tax na kate… (The one where there is no tax deduction on interest earnings)” Shobhit asks. Yes and we also do not want to show it in our books as all the money is in cash. “…woh sir, options hain… (We have options for that)”, tells Shobhit. He elaborates. “…insurance bhi hai… kyunki ussme paisa MWP trust me daal denge…trust ko koi touch nahi kar sakta. Bahut acchi feature hai… (We have insurance plans. We can put money in MWP Trust. Nobody can touch a Trust. It’s a very good feature)”. So how does it work? “…wo kya hota hai sir apne naam par lenge. Ek trust banwayenge baccho aur biwi ke naam par. Uss trust ko koi bhi law break nahi kar sakta aur ussme saare return tax free hai. Ek to wo hai..ek hai mutual fund ne bhi ek aadh acchi cheese hoti hai agar dividend pe lete ho to dividends are tax free…(Will get a trust registered in the name of wife and children. Nobody can touch the trust. There are a few good things in mutual funds too. If you get the dividend plan it is tax free)”, explains Shobhit.
The reporter requests them to keep the details of the deal a secret. They assure him of confidentiality and tell him that only officials senior to them will be in the loop. “… nahi nahi ye upar upar hi rahega usme aapko neeche tak koi baat nahi jayegi…( no, no, it will remain at the top level only. Nothing will go to the lower levels)”, assures Shobhit. Soni chips in, “…wo approval ek lena parta hai… (We have to take approvals).” We are satisfied to know that this business is being done with the connivance of the senior officials.
How will the cash be invested? The reporter wants to know. “…main na saari cheese samajh loonga aur wahi jitna address kar paaonga wo sab kar doonga… (I will understand all the requirements and address them as much as possible)”, assures Shobhit but Soni wants to know the amount, “…agar volume ka idea do to ussi hissab… (If you could give us an idea on the volume then we can plan accordingly)”.
The reporter tells them that Rs 5-7 crore will be available in the first installment and more will follow. Will it be in cheque, Garg questions? “…wo sab to cash me aayega na… (It will all come in cash)”, clarifies Soni after hearing the fictitious story of dubious source of funds. “…agar aap 10 lakh se jyada cash account me daalte hai to woh automatically RBI me report hota hai… (if you deposit more than 10 lakh in the account then it gets reported to RBI automatically),” cautions Soni. What about the trust route then? Even there the money will go through the account. “…wo aisa cash ke through to ho nahi jayega. Account khulega paisa ussme aayega then we will invest from there… (It won’t happen through cash. Once the account is opened, cash will come into the account and will be invested from there),”informs Garg.
So what is your advice then? Advice will come after we know the exact amount of cash. Soni says, “…Issiliye main pooch rahi hoon ki volume kya hai, aap jo crore ki baat kar rahe hai wo jo ki cash ki baat kar rahe hai to usme kissi bhi banking system me problem hogi… (That is why I am asking you as to what the volume is. You are talking of crores in cash, which will surely create problems in any banking system)” Will there be a problem if we put cash in amounts of Rs 5-6 lakh? A way out will come out after discussion. Garg says, “…sir ek baar apse discuss kar lete hai… (Sir, let us discuss this).”We also need lockers to keep the cash. Garg informs that locker facility is not available but he will get it done in some other branch. He promises, “…yeha par nahi hai, baki gurgaon, G.K. me karwa denge… (We don’t have the facilty here, but will arrange in Gurgaon or G.K.)”
We just want that our black money should get converted into white, says the reporter before bringing the meeting to an end. The bankers have a hearty laugh at his proposition. Garg states, “…Sir, ye to black ko white kara rahe hai aap… (Sir, you are getting the black money converted into white)” Soni maintains a cautious tone. After suggesting ways to utilize cash she has this to say, “…dekhiye ye banks advise nahi karenge ki aapko kaise who karna hai ye toh apka CA batayega kaise kya karna hai… (See, the banks won’t advise you on what and how you should do this. Your CA will tell you the way out).”
Why don’t we use the TRUST method as advised by you? The reporter asks Garg while walking out of the meeting. “…safe to hai but ye hai ki system me bhi to paisa daalna hai na, trust me directly to paisa ja nahi sakta… (It is safe but we have to bring cash into the system. We can’t put cash directly in the Trust),” he says. His only problem is to decide on how to put the cash into the system. He suggests, “…wo cheese to ab decide karni paregi, ya toh aap dikha do ek baar me ki sale of land hai, simple 2-3 crore nahi…20-25 lakh ek baar me dikha do sale of land hai, thik hai… (We will have to decide that. Either you show for once and all that [the fund has been procured] from sale of land, not just for 2-3 crores but show an amount of Rs.20-24 lakh [as the money acquired] from sale of land).”
Shobhit once again becomes inquisitive about the identity of the politician. The reporter declines to take the name for the sake of secrecy and safety. Garg assures, “… bank bhi apni safety dekhega…bank ye bhi dekhega ki uska customer bhi safe hai… (Bank will also look after its safety. It will look after the safety of its customers too).” Before parting Garg informs that the transfer of the money to offshore accounts is possible but first he needs to bring the cash into the system. With that assurance, the duo bid farewell to each other.

 

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Operation 136: Part 1

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