Hogging gold, laundering money: Strange ways of the smugglers

Hogging gold, laundering money: Strange ways of the smugglers

(This is Part 3 of the series 'Kerala's Shady Gold Rush' by Malayala Manorama. Part 1 here: Who is Swapna Suresh, the woman wanted in the gold-smuggling case? Part 2: Swapna, Sarith lost out on at least Rs 30 lakh profit after gold seizure)

When Swapna Suresh quit her job in the United Arab Emirates consulate in October 2019, she is learned to have claimed that she got a job with the Kerala Information Technology department. She was given a proper farewell before she joined the Space Park run by the Information Technology department. Strangely enough, Sarith Kumar also quit his job as the public relations officer even though he did not possess any other offer. Both of them were to be embroiled in a gold smuggling case later.

Though Swapna was a secretary to the consular general, she was a power centre in the consulate. The consulate was responsible to the diplomatic affairs in most of south India and Swapna made sure that all communications to the who’s who in Kerala, Karnataka, Tamil Nadu and Puducherry governments were routed through her.

The circumstances leading to her shift from Air India SATS to the UAE consulate is also under investigation. Did she receive any help from any higher-ups? In fact, she was not the original choice to be appointed as the secretary of the consular general when the consulate was being set up in 2016. When that candidate, who was offered an appointed letter, went to the consulate to join duty, she was told that someone else was already appointed in the post. She was offered another post but was forced to quit later.

There were a lot of complaints against Swapna. Many of the employees who left the consulate had cited her as the reason for them to quit. To be fair, she maintained a cordial relation with P S Sarith Kumar, the public relations officer.

Several persons who claimed to have been close to Swapna said she broke ties with people as easily as she made them. She was motivated by the growth in her career and her pursuit of luxury. She had short-lived relations after separating from her husband.

One of her stints in Thiruvananthapuram was as a secretary to a Tamil Nadu native who was involved in several international scams. She was in charge of a firm that recruited candidates for overseas jobs and educational courses. However, she was chucked out when the owner of the firm died.

She later joined a company in Technopark as a trainee. She married a colleague before she left the company. Then she joined Air India SATS.

Smuggling in the time of COVID-19

There is no let-up in gold smuggling even as countries shut down in the face of the COVID-19 pandemic. Gold worth Rs 1.52 core was seized from people who travelled to Kerala on chartered flights or those arranged as part of the Vande Bharat mission up to June 25. All this in 10 cases busted by the customs department in Kannur, Kozhikode, Kochi and Thiruvananthapuram airports.

People from Kerala have even tried to smuggle gold through sea routes. Nisar Aliyar, a native of Perumbavoor, and his associates were taken into custody with 170 kilograms of gold in Mumbai on March 29, 2019. The Directorate of Revenue Intelligence intercepted the gang which was trying to smuggle gold articles as if they were scrap materials made of brass from Dubai. The contraband was headed for Gujarat and other places in India.

Aliyar and team had smuggled in 4,522 kilograms of gold worth Rs 1,473 crore, subsequent investigations by the Directorate of Revenue Intelligence revealed.

A lack of follow-up investigations is the main reason for the unabated smuggling of gold. Most probes end with the arrest of gold carriers, who are often the pawns of a larger game. The investigative agencies have no clue about the real destination of the gold they intercept.

All the carriers have the same confession to make: that they had no idea who the buyer is and they were expecting to be greeted by the buyers at the airport. That’s where the investigation ends. Only in a handful of cases have the agencies managed to trace the trail outside the airport.

The carriers work for two-way tickets to Dubai, accommodation in the emirate and Rs 50,000. Frequent carriers can expect to get a bit of extra money to go shopping in Dubai and visit tourist attractions.

The terror link

The customs department came across a curious case in 2016 in which an Ireland native was used to smuggle 126 kilograms of gold in 21 trips through the Kochi airport. The carrier was arrested on the 21st trip with 10 kilograms of gold.

He told the investigators that all the gold he had successfully smuggled in had been received by a native of Kaloor from a five-star hotel in the city. That lead was not of much use because the Kaloor native had forged a passport to fly to Iran before he was cornered.

The investigation eventually led to a racket that specialised in supplying fake passports for people including terror suspects. The gang is suspected to have helped recruits to the Islamic State group by giving them passports. This was a strong piece of evidence suggesting the link between gold smuggling and terrorism.

Black money

Gold smuggling is closely related to money laundering. Those with unaccounted money invest that in buying gold from African countries. They just have to give the black money to agents in Kerala, who will route the money through hawala channels to Africa, where it is converted to gold which will be flown to India through Dubai.

An emerging pattern has called into question the common perception that gold smuggling is a way to make profit by evading import duties and taxes. The smuggled gold is not sold at a lower price but often at a 30 percent premium to people who want to get rid of their unaccounted money.

Stashing currency notes is no longer an option after demonetisation. Converting the money to gold is not easy these days because a transaction requires Aadhaar and PAN details. The same applies to real estate transactions. That also entails additional expenses such as registration fees. Buying smuggled gold is an easy option and gold hardly goes out of demand.

Tipping is lucrative

As smuggling increased, so did the options available for informers. The customs department used to reward informers Rs 50 for every gram of gold seized, provided the information was accurate. That rate has been increased to Rs 150 per gram. That translates to Rs 1.5 lakh for an informer who tips about a kilogram of smuggled gold.

The incentives for busting a smuggler has gone up to the customs officers too. The officers can claim a reward of up to 10 percent of the contraband.

Smuggling school

Being a gold carrier is not an easy job. They are given at least three weeks’ training to go undetected in the airports. Gold is stuffed into balloons and condoms and pushed into the body of the carriers. The carriers have to keep their composure with the metal swallowed or squeezed into the rectum. They have to keep themselves steady for up to five hours.

They are given training in swallowing gold up to 400 grams in small parts.

The customs officers can spot a carrier even without an accurate tipoff. They keep frequent flyers on watch and look for travellers who show signs of uneasiness. Perhaps they are carrying metal pieces in their stomach or rectum. Anxiety and panic are other giveaways.

(Compiled by B Murali with inputs from Jijo John Puthezhath, G Vinod, K Jayaprakash Babu, Raju Mathew, Mahesh Guptan, A S Ullas and Joji Simon)

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