Greed, revenge & blood: A peek into the world of gold smugglers

Gold smuggling
Gold smuggling

(Manorama correspondents expose the network and modus operandi of gold smugglers in Kerala in an investigative series. This is the first part.)

Smuggling of gold into Kerala through its airports is rampant despite carriers being caught almost daily. It has now moved beyond being an economic offence to a law and order issue with gangs of smugglers often clashing with each other.

Smuggling of gold into the State has undergone a major change. Smugglers are keeping a step ahead despite the authorities frequently nabbing carriers and confiscating the contraband. Once dependent on cash transferred through hawala (illegal route), gold smuggling has now become a lucrative 'sector' to invest black money.

New faces have joined the illegal activity as it underwent a change. If the carriers were once those shuttling between countries on visiting visas, today families, too, are part of the network. In short, it has now become a whitecollar 'business', with the carriers undergoing a complete makeover.

Still, it is not without its share of risks. Smugglers themselves are confused over the role s/he should don: carrier, smuggler, traitor or robber of another carrier?

Instances of carriers turning double-agents, simultaneously catering to the interests of rival groups, too, have been reported from Kerala.

The investigation into the abdution and murder of expatriate Abdul Jaleel of Agali at Malappuram led investigators to the murky world of gold smuggling and the gangs involved. Even as the probe has been proceeding — five people were arrested on Saturday — the smugglers are actively carrying out their business, using whatever possibilities they could lay their hands on.

One such tool is WhatsApp, the popular cross-platform instant messaging service. A group, 'COVID-19', created on the popular platform snares carriers, besides providing 'valuable information' to Dubai-based smugglers.

The details of carriers, their photographs, passport details and smuggling history, are shared in the WhatsApp group, created after several instances of carriers turning double-agents. Recurring losses have made the Dubai and Saudi-based gangs to act hard against those cheating carriers and gangs that deceitfully take away the contraband.

Once a gang decides on a carrier, his personal details are shared in the WhatsApp group to know his credentials. Questions will follow, whether he had cheated before, or if he would cheat. This act, however, has a drawback. The carrier's cover is blown.

Stories of cheating and confiscation of smuggled gold are also shared in the group.

Traitors on WhatsApp

Gold smugglers have no qualms in admitting that 'traitors', too, are part of the WhatsApp group. With the increase in the number of gangs, trust deficit has become the norm. Cheating and betrayal have become common. Those who betray other gangs, too, are part of the WhatsApp group. But the gangs have to rely on the social media group to survive.

Smugglers who were active earlier, but now sidelined, are eyeing new sources of income. One such source is the reward the Customs and Directorate of Revenue Intelligence (DRI) offer in return for credible information on smuggling.

Incidentally, these 'semi-retired' smugglers provide information to rival gangs in Kerala as well. The gangs offer Rs 5 lakh to the carrier in exchange for the gold he had brought on behalf of another group. If the carrier agrees, the gang gets the precious metal for a lesser price and risk.

Normally, five to 10 people jointly invest in smuggling gold. If one among them has decided to cheat the group, he won't put in his money, but backs off without arousing the suspicion of others.

In tune with the times

Smugglers have started 'recruiting' those with work and family visas to carry gold after the Customs department back home targeted and frisked those travelling on visiting visas. Those with visiting visas were used as carriers earlier.

Instances of authorities finding illegal gold on children and their parents, too, are not rare at the airports in Kerala.

(The United Arab Emirates is considered a safe destination as there are no strict checks there. But the situation is different in Saudi Arabia. If caught, the smuggler will be sentenced in Saudi Arabia itself. Hence, the packing and ferrying charges operating from Saudi are higher compared to the UAE).

'Setting' at airport

The charges mentioned above are only for smuggling in the gold in the baggage or in the body. Smugglers are often hand-in-gloves with officials at the airports, who take a cut. Striking a deal with officials, 'setting' in smuggling parleys, will eat into the carrier's fee.

The smugglers pay between Rs 80,000 to Rs 1 lakh a kilogram to officials to aid their illegal activity. Smugglers themselves said gold weighing more than 1.5 kg is almost always carried out with the help of officials. Large quantities of gold are smuggled only on assurance that it will reach outside the airport without being caught.

Despite 'setting', there were instances of authorities seizing gold at the airport. Such incidents occur when the 'set' batch of officials are transferred.

Reverse hawala

Investigators have found that blackmoney in Kerala is widely used to smuggle gold. Smugglers, too, admitted to active 'reverse hawala' transactions in the State. Reverse hawala means providing foreign currency equivalent to Indian rupee handed over to agents by the overseas representative.

The hawala gangs themselves are handling the reverse flow also, investigations revealed. Foreign currencies received through reverse hawala in Dubai or Saudi are invested in gold, and smuggled to Kerala.

The reverse hawala helps in hiding black money. Additionally, the huge profit reverse hawala brings within a short period of time encourages many to hand over black money to hawala agents. This attraction explains the unabatted gold smuggling despite officials regularly seizing huge quantities of gold worth crores of rupees.

It has also been revealed that blackmoney from other States too are invested in smuggling through the hawala agents in Kerala.

There are also yet another group that directly smuggle gold using the currency received through reverse hawala and those funding existing gangs of smugglers.

Investigators have now yet another set of reverse hawala gangs operating in Kerala. They collect Indian currencies from large-scale merchants with daily turnover running into crores. The merchants could be in Chennai, Bangalore or Mumbai.

The currencies thus collected are delivered to expats, and foreign currencies of equivalent value are deposited into the accounts of the merchants' respresentatives overseas.

In case of reverse hawala, the agent hands over foreign currencies equivalent to the Indian rupee 'deposited' in Kerala to smugglers.

Betrayal with happy ending

Smugglers seldom forgive backstabbers. However, a carrier, who tried to double-cross smugglers last week was left in shock and awe after he was monetarily rewarded.

The incident happened in Kozhikode. The carrier reached Kerala with one kilogram of gold hidden in the baggage handed over to him. He decided to betray the smugglers, and gave them a slip. Once home, he checked the baggage threadbare.

After failing to find the gold, he rang up the smuggler to inform that the wrong bag had been handed over to him. The smuggler asked the carrier to reach his residence. At the residence, the smuggler took the bag and handed over Rs 10,000 to the carrier. No questions were asked.

Unknown to the carrier, the gold was in the bag itself, hidden in its beading.

Smugglers often send dummy consignments too. A carrier was made to hide three capsules in his private parts. Despite completing all the checks, he hung around at the Kozhikode airport. Customs took him into custody on suspicion, and on further checking found the capsules — 'unda' in smugglers' lexicon -- which had nothing but clay. Smugglers call them dummy, which they often do to check the integrity of carriers.

But then, why did the carrier stay in the airport even after completing the mandatory inspections? Was it to bag the reward the customs and DRI offer? Or was it a ploy to divert attention from the real consignment of the contraband? A probe is on into his motive


Rate for smuggling 1 kg of gold (as of May 15)

A: From Saudi Arabia

Price of gold: Rs 44.75 lakh

Packing: 35,000

Carrier's expenses (airfare, remuneration, accommodation, etc.): Rs 1.20 lakh

Expenses of the receiver: Rs 10,000

Total expenditure: Rs 46.40 lakh

Selling price: Rs 51.50 lakh

Profit: 5.10 lakh

B: From UAE

Price of gold: Rs 48.20 lakh

Packing: Rs 11,000

Carrier's expenses (airfare, remuneration, accommodation, etc.): Rs 80,000

Expenses of the receiver: Rs 10,000

Total expenditure: Rs 49.21 lakh

Selling price: Rs 51.50 lakh

Profit: 2.29 lakh

Next: What caused the death of 5 people in a road accident?


Gold Rush
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