As the Enforcement Directorate (ED) Wednesday said it has attached properties worth over Rs 26.65 crore of journalist Upendra Rai in connection with a money laundering case, the Law Ministry has allowed the CBI — probing extortion charges against Rai — to book him under the Official Secrets Act.
Rai is being probed by the CBI and ED for allegedly extorting money from businessmen on the pretext of helping them settle cases of the Income Tax Department and other agencies. During searches, agencies have allegedly found in his possession call data records of businessmen and nearly 140 classified Suspicious Transaction Reports (STRs) of the Financial Intelligence Unit (FIU) in a pen drive.
“As such, the availability of those STRs with an unauthorised person appears to be prejudicial to the interests of the state and the unauthorised possession of STRs by a private person warrants the offence under the Official Secrets Act,” the Department of Legal Affairs advised on August 9.
The STRs, sources said, pertain to 2015-16 and are connected to firms being probed by various agencies. This confidential information from the FIU was sent to law enforcement agencies for further intelligence gathering and building money laundering, black money generation and export/import fraud against individuals or firms.
The Law Ministry opined that a “private person was found in possession of such a classified official document which is not even available to the concerned government officials in normal course”. As per FIU rules, STRs disseminated to a law enforcement agency is meant to be accessed only by the concerned agency. They are not disclosed under the Right to Information Act.
Reading out sub-section 2 of Section 3 of the 1923 OSA Act, the Law Ministry said that “it would not be necessary to show that the accused person was guilty of any particular act tending to show a purpose prejudicial to the safety or interests of the state”.
It further advised that the person could be convicted “if, from the circumstances of the case or his conduct, it appears that his purpose was prejudicial to the interests of the State”.
The OSA violation, punishable with imprisonment extending up to three years in this case, would be in addition to penalties that are handed under the Prevention of Money Laundering Act and the Prevention of Corruption Act for which Rai is being probed by the ED and the CBI, said sources.
The assets the ED attached include nine residential flats spread across Delhi-NCR and Uttar Pradesh and three luxury cars apart from bank deposits and mutual funds.
Incidentally, the Supreme Court Tuesday had rejected Rai’s petition to restrain ED Joint Director Rajeshwar Singh from probing cases against him. Rai had alleged that he was being probed because he had made allegations of corruption against Singh. He had also earlier filed petitions against Singh in the court which were all rejected on the ground that similar allegations had been made earlier and the same had been probed.
The CBI had arrested Rai on May 3, while the ED apprehended him on June 8. The ED has already filed a prosecution complaint on August 6 against Rai at a special court in Delhi.
“Upendra Rai was found involved in extortion of huge amount of money from different companies and corporate houses. He then layered the ill-gotten money and integrated the same into the financial system, finally projected it as untainted money. Upendra Rai has been involved in generation and laundering of proceeds of crime worth Rs. 29,58,09,570 as per estimates,” said an ED statement. According to the ED, the alleged extortion money Rai got was projected as received from different companies in the name of consultancy services that he provided.
“Upendra Rai sent cash to different companies and asked them to return it to him through banking channels. These transactions were not legal. To give genuine and legal shape to those transactions, he insisted that those companies enter into an agreement with them/their associates for consultancy services, issued false invoices and received payments through banking channels against the cash sent by him,” said the ED statement.
The agency also said Rai had also set up various shell companies, which he used to move his ill-gotten money. Rai’s immovable assets attached by ED include four flats in Greater Kailash in Delhi, a flat and a penthouse in Lucknow, two flats in Noida and one flat on Hailey Road near Connaught Place. The ED has also attached Rs 5.62 crore in fixed deposits and mutual funds.
“He also operated many bank accounts in his and in the name of his wife, brother, sister and other associates and invested the money generated illegally in the fixed deposits and mutual funds. The amount invested in 20 bank accounts and three mutual funds in the name of Upendra Rai and his accomplishes have been traced out,” said the ED statement.