New Delhi, Nov 4 A special PMLA court in Uttar Pradesh's Ghaziabad has convicted two persons under the anti-money laundering law even though they were earlier acquitted in the scheduled offence of bank loan fraud investigated by the CBI.
In an order issued on November 3, the court said, "Initially, the thinking was that unless a person was convicted of the predicate offence, you cannot convict him of money laundering. But that thinking has evolved now."
The law stipulates that a money laundering case can only be filed when an underlying offence (predicate or scheduled offence) is registered by the police, Central Bureau of Investigation (CBI) or a defined probe agency. Courts had held that once a person is acquitted in the predicate offence, they automatically stand clear of money laundering charges.
In the latest case, five people were convicted by the said court under the Prevention of Money Laundering Act (PMLA) including a former Syndicate Bank branch manager posted in Gajraula in Amroha district of Uttar Pradesh, according to the court order accessed by PTI.
All five accused in the case probed by the Enforcement Directorate (ED) have been handed a rigorous imprisonment of three years and a fine of Rs 50,000 each by Special Judge Bharat Singh Yadav.
If the convicts default on the fine amount, they will have to undergo simple imprisonment for three months, the ED said in a statement.
Those convicted include former Syndicate Bank manager V N Mathur and private persons Rajeev Kumar, Arvind Chaudhary, Ankit Chaudhary and Pramod Kumar.
"It is noteworthy that Rajeev Kumar and Pramod Kumar, though acquitted in the scheduled offence (probed by the CBI), have now been convicted for the offence of money laundering upon appreciation of the evidence and material placed on record by the ED," the agency said.
In its order, the court said, "Initially, the thinking was that unless a person was convicted of the predicate offence, you cannot convict him of money laundering. But that thinking has evolved now."
The Financial Action Task Force (FATF) has now come around to the view that if the predicate offence has thrown up certain proceeds and someone dealt with those proceeds, they could be found guilty of the offence of money laundering, the order said.
"What we are trying to do is to bring this law on lines of laws that are commended by FATF and all countries have obliged to bring their laws on the same lines," it said.
"The intention of the legislature had always been that a person will be held to be guilty of the offence of money laundering and will be punished as long as the person is enjoying the proceeds of crime by its concealment or possession or acquisition or use or projecting it as untainted property or claiming it as untainted property or in any manner whatsoever," it said.
The court said money laundering was a "technically defined" offence and was more than "simply converting black money into white or white money into black".
The ED investigation found that Mathur, during 2006-07, entered into a criminal conspiracy with late Narendra Singh, Arvind Chaudhary and others.
He sanctioned loans and overdraft limits to them, their firms and associates based on forged sale deeds of non-existent properties, false non-encumbrance certificates and false valuation reports.
The ED said the loan proceeds, instead of being utilised for the sanctioned purpose, were withdrawn in cash and layered through various savings bank accounts and demand drafts to conceal their illicit origin.
The tainted funds were thereafter integrated through the acquisition of immovable properties, it said.
The ED registered a money laundering case in 2010, taking cognisance of a CBI FIR.
