Kerala gold smuggling accused Sandeep Nair, Swapna Suresh (in centre) arrested by NIA Saturday. | Twitter/ANI
Kerala gold smuggling accused Sandeep Nair, Swapna Suresh (centre) arrested by NIA | Twitter | ANI

New Delhi/Bengaluru: Allegations of shady deals, irregularities in grant of government projects, instances of illegal imports dating back to 2017, money laundering and kickbacks running into crores of rupees — the Kerala gold smuggling case has opened a can of worms of suspected “networks” allegedly involving senior state government functionaries and diplomats.

The case, registered in July after 30 kg of gold worth 15 crore was sneaked into India from Dubai through diplomatic baggage, is being probed by three investigation agencies — the National Investigation Agency (NIA), Enforcement Directorate (ED) and the Customs department.

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While Customs is probing the alleged network used to illegally pump gold into India, the NIA is probing if the “smuggled gold” may have been used by the Kerala-based Popular Front of India (PFI) to fund “anti-national” terror activities. NIA sources, however, told ThePrint that so far they have found no such link.

The ED is probing the suspected money laundering aspect and if the alleged racket was used to finance protests against the controversial Citizenship Amendment Act (CAA)

The various probes so far have led to 30 arrests, including a host of alleged facilitators, financiers, black gold traders, former employees of the UAE consulate and a principal secretary to the Kerala Chief Minister Pinarayi Vijayan.

The high-profile arrests include that of former UAE consulate employees Swapna Suresh and Sarith Kumar, a man named Sandeep Nair and M. Sivasankar, the chief minister’s former principal secretary.

Apart from the arrests, the NIA had in September questioned Kerala Higher Education Minister K.T. Jaleel. He was also questioned by Customs officials in Kochi after being named as a “person of interest” for allegedly illegally importing over 1,800 kg of dates and 300 tonnes of the Quran in 2017 using the same diplomatic channel.

The ED had also asked C.M. Raveendran, the additional private secretary of the chief minister, to appear before it for interrogation on 10 December. He didn’t show up. On two previous occasions too, Raveendran hadn’t turned up for questioning.

His name surfaced following a statement by accused Swapna Suresh to the agency, in which she claimed that Raveendran used to contact her for visa stamping and certificate attestation work.

Over five suspects in the case are in the UAE and attempts are being made to get them back. The NIA has approached Interpol to trace these individuals and notify Indian authorities of their whereabouts. Agencies have also sought permission from the Ministry of External Affairs to question some senior diplomats from the UAE consulate in Thiruvananthapuram, which has still not been granted.

Besides arrests, the investigation has led agencies to unaccounted wealth allegedly amassed by Sivasankar and Swapna Suresh through impropriety in the awarding of government projects.

While Sivasankar’s lawyer Rajesh Kumar T.K. did not comment on the case saying that the matter is sub-judice, Swapna’s lawyer could not be contacted.

ThePrint accessed case files, court documents and spoke to sources in Customs, NIA, ED and Directorate of Revenue Intelligence to piece together the developments in the case so far.


Also read: How gold scam’s Swapna Suresh has emerged as Kerala’s new woman villain  


The baggage and the nexus

On 5 July this year, a bag filled with dates, bathroom fittings, electronic items and food packets arrived from Dubai in diplomatic cargo for clearance at the Thiruvananthapuram airport. It was meant to be handed over to Rashed Khamis Ali Musaiqri Al Ashmia, the acting Consul General at the UAE Consulate in the Kerala capital.

When the diplomatic baggage, usually cleared without an inspection, was checked following an intelligence input, 30.25 kg of gold worth around Rs 15 crore was found to be concealed in the cargo.

The Customs department had sought permission from the Ministry of External Affairs and the inspection was videographed.

After Customs officials found the gold, the department arrested P.S. Sarith, a former employee of the UAE Consulate who was to receive the baggage for Ashmia.

Investigations revealed that it was not the first time that such baggage had made its way through the diplomatic channel. According to sources in the Customs, over 20 such consignments carrying over 160 kg of gold had allegedly come to India from Dubai since September 2019.

“It is a nexus. For diplomatic baggage to come, a lot of paperwork is required at both the origin and destination of the baggage,” a source in the security establishment said. “For this paperwork, the diplomat’s passport is required, her signature, some forms are to be filled, and then it comes through this channel.

“Once all paperwork is done at the origin country, it is updated in the automatic system, and we get a flash here,” the source added. “Then it is all automatic, the baggage will pass without any checks. In this case, the paperwork was done in Dubai, with the connivance of some people here in India including former officials of the consulate.”

The source alleged that the scamsters have complete control of paperwork right from Dubai. Agencies are now probing if any of the diplomats whose passports were being used to push in gold, are involved.

A request

Once Sarith was arrested, he is said to have claimed that Swapna Suresh, a former employee of the UAE Consulate later employed with the Kerala IT Department, is also allegedly involved in the racket.

Investigations revealed that Swapna is a close associate of M. Sivasankar, a senior IAS officer in Kerala and the then secretary to CM Pinarayi Vijayan. Sivasankar had allegedly in his official capacity made three to four requests to the Customs department for clearance of baggage in the past.

According to a source in the Enforcement Directorate, there are two chats between Sivasankar and Swapna from April 2019, wherein she allegedly requested him to intervene with the terminal manager of customs authority for facilitating clearance of diplomatic baggage without examination.

The ED source claimed that in his statement to the agency on 15 October, Sivasankar admitted to have spoken to a senior officer for the clearance.

“It was also found that just after April 2019, two dummy diplomatic baggage also came in the month of July that were also cleared and may have contained smuggled gold. They went unchecked because of constant intervention by Sivasankar,” the source alleged.

“Interventions by Sivasankar sent a message to authorities concerned that Swapna has strong links in the CM office and this played a crucial role in allowing diplomatic cargos go unexamined even when authorities had some suspicion,” the source alleged.

Swapna, in her statement recorded on 10 November, which is now part of court records, has claimed that Sivasankar and his team in the Chief Minister’s Office were fully aware of the smuggling of gold and other electronic items through the diplomatic channel.


Also read: Tale of 2 Kerala scams — solar scandal that singed UDF govt and gold that has LDF in a spot


Planning and execution

Agencies have named Sarith, Swapna, Sandeep Nair and K.T. Rameez as the key accused in the scam. They claim that the four first met in Sarith’s car in the parking area of a private gym in Thiruvananthapuram. During that meeting, Rameez allegedly offered Rs 50,000 as commission for every kilogram of gold smuggled from Dubai.

Swapna and Sarith, however, allegedly demanded $1,000 (around Rs 74,000) and an amount to be paid to the UAE consulate as well.

In a statement to the ED also part of court records, Swapna said that she was the secretary to consul general of the UAE Consulate in 2019 when Rameez allegedly sought details of smuggling gold using the green channel.

After their deal, Rameez allegedly sent two consignments in July 2019 on a ‘trial basis’. According to sources, it was Sarith who allegedly forged the authorisation letter required for customs clearance and managed to get clearance from Dubai airport.

Officials close to the investigation told ThePrint that the three — Sarith, Swapna and Rameez — allegedly smuggled a total of 166.882 kg gold using diplomatic channels 21 times until they were busted in July this year.

“They facilitated the smuggling of gold 17 times between November and December 2019 and 4 times between January and June this year,” a second source alleged.

According to Swapna’s statement, she and the other accused managed to smuggle 36 kg of gold in December and another 30 kg in June this year.

The bank lockers

Once the gold is smuggled into India using a diplomatic channel, the facilitator is paid the due and the consignment is then distributed and sold in the open market. There is a network of buyers and sellers who operate the nexus.

The kickbacks are then laundered, a third source said.

In this case, the investigation revealed that the alleged kickbacks received from these consignments were stashed in two bank lockers in the name of Swapna and a man named Venugopal, Sivasankar’s chartered accountant.

Multiple sources in ED, probing the money laundering angle in the case, said that Sivasankar allegedly facilitated the opening of Swapna’s bank account locker to stash the money.

“Venugopal, who knew Sivasankar for the past 20 years, had been helping Swapna in her finances,” an ED source claimed.

The NIA, during raids, had recovered over Rs 1 crore from these two lockers — Rs 64 lakh from an SBI locker and Rs 34 lakh from a Federal Bank locker.

Venugopal has also made available WhatsApp chats to the agencies that he sent to Sivasankar constantly keeping him informed about Swapna’s transactions.

Government projects and the irregularities

Besides money earned from gold smuggling, ED claims to have evidence of Sivasankar and Swapna receiving money from private companies including Unitac Builders for facilitating the award of a project under the LIFE mission.

The LIFE mission is an ambitious Kerala government project to provide low budget housing to the homeless and poor in the state.

According to investigators, Sivasankar shared with Swapna over messages, confidential details about the LIFE Mission project, including quotations that are likely to be quoted by two potential bidders for execution of projects.

All these messages, a fourth source said, were shared before the tender was opened in January 2020.

“It is important to note that out of total 36 projects under LIFE Mission, 26 went to these two entities whose names appear in the WhatsApp messages,” the source said.

“This is serious and casts a serious doubt on the transparency of the bidding procedure under the LIFE mission,” ED counsel Unnikrishnan told ThePrint. “Sivasankar was overall in-charge and was supervising the implementation of the project as principal secretary to the CM.”

“It is certain that the kickbacks have exchanged hands in one of the projects under LIFE Mission, which makes the investigators suspect that it may have happened in other projects also and thus it needs further investigation,” he said.

Investigation has also revealed that Sivasankar was allegedly in regular touch with a man named Santhosh Eappan of Unitac Builders and wanted him to be a part of some contract under KFON and Life Mission.

“Interaction between the two show that the parties had indulged in paying kickbacks for award of contracts,” a document submitted by ED in the court claims.

According to investigators, Sivasankar also made attempts to look for a flat for Swapna and that there is a WhatsApp chat on 1 November 2019 between Venugopal and Sivasankar in this regard.

The fourth source said that in another chat dated 11 November 2019, Sivasankar asked Swapna whether a locker had been arranged to which she replied: “Not yet.”

“Why this interest in her locker? He knew that Swapna was making money through gold smuggling and he was getting money from Unitac; so he needed a locker to park the money,” the fourth source alleged. “Swapna already had two lockers and opened a third.”

“Sivasankar also received a commission of Rs 45 lakh from Unitac in three installments,” the source added.

Moreover, in his statement to the agencies (part of court records), Venugopal, who has not been made an accused in the case yet, has said that Sivasankar had come to his residence along with Swapna and Rs 30 lakh in a bag.

Venugopal has allegedly told agencies that he was hesitant to handle such a huge amount but Swapna explained that the cash had come from genuine sources and asked him to keep it in the locker.

“All these transactions were happening and still Sivasankar has said in a statement that Swapna was not financially well off and he tried to help her secure a good job,” the fourth source claimed.

The ED has also told the court that it can bring on record all the WhatsApp messages seized from their phones but that would be “voluminous and majority are intimate in nature”.

The directorate has claimed that another person— Khalid, the finance head of the UAE Consulate — was the major beneficiary of the kickbacks received from Unitac Builders. Khalid, also a close associate of Swapna, was allegedly paid the kickback in lieu of facilitating the contract from Red Crescent under the LIFE Mission Project.

ED claimed that during questioning Swapna also disclosed names of certain persons who were very close to Sivasankar, one of them was involved in Taurus Downtown projects and that there could be many more private owners who may be paying money to him for getting projects.

Swapna in her statement to ED has also alleged that Sivasankar was fully aware of the gold smuggling through diplomatic channels.

An ongoing phenomenon

In a state like Kerala that loves its gold, over 100 to 110 tonnes of gold worth Rs 8,000 to Rs 10,000 crore is smuggled annually through separate routes, a source in the customs department explained.

“This gold is brought by different routes including air, land, water and is then sold,” the source said. “It is an ongoing phenomenon and weak documentation is a major cause of this.”

“When it comes to detecting gold smuggled through air, it is very difficult if it is compound gold. Even if it is detected and caught, prosecution is a difficult task,” the source said.

Like in this case, since diplomats enjoy immunity, permission is required from MEA to question them or even check their baggage.

“Besides, even if they are found to be involved, they cannot be arrested here. In customs after investigation of a case, a show-cause notice is issued, then within six months a criminal complaint is filed after evidence is gathered,” the source said. “If found guilty the punishment is only a few years, or the payment of a fine.”


Also read: These are top 5 Indian airports where the most amount of smuggled gold was seized in 2019-20


 

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