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Enforcement Directorate prepares to file case in Citibank fraud

February 5, 2011‐ New Delhi, India

Media sources say that the Indian Enforcement Directorate is preparing to soon file a case of money laundering in connection with the Rs 400 crore fraud allegedly perpetrated by a Citibank employee.

The media story says that ED is making the move after studying the FIR in the case and scrutinised other aspects of the scam, has decided to file a case under the stringent Prevention of Money Laundering Act (PMLA). The ED investigation will focus on Puri and others who were involved in laundering of such huge amount of money.

The PMLA gives the power to the ED to attach both movable and immovable properties of the accused.

Citibank Relationship Manager Shivraj Puri has allegedly collected the money on the basis of a fake SEBI circular that claimed the scheme had the market regulator's approval. After the scam broke out, Puri was arrested and investigation agencies stepped in.

Earlier, the Reserve Bank of India (RBI) is reported to have prepared to investigate as to whether or not the bank has followed the KYC and STR norms that banks have to follow. The Income Tax Department has also begun scrutinising the investments and tax payments of some high net worth individuals who were allegedly duped by Puri.

The entities whose funds were diverted by Puri into the accounts of his relatives include Hero Corporate Services (Rs 13.75 crore), OKS Sapan Tech (Rs 2 crore) and Satyam Auto (Rs 25 crore), Mayar Infratech (Rs 24 crore), Spaid (Rs 62 crore), Karopat Pad (Rs 8 crore), Sunil Kant and Sons (Rs 3 crore), Aero Infratec (Rs 25 crore), Hero Exports (Rs 97 crore), Rekha Munjal (Rs 5 crore), Munjal Investments (Rs 2.5 crore) and Munab Braej (Rs 71 crore).

It may be recalled, Citibank has earlier said it is considering 'fair compensation' for affected customers.

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