The Directorate General of Intelligence and Investigation of the Federal Board of Revenue (FBR) has unearthed a case of money laundering involving a group of companies involved in conspiring and then carrying out placement, parking and integrating proceeds of crime in a residential project known as “HSJ ICON” under the cover of” HSJ Construction”.
Regarding this matter, the Directorate of Intelligence and Investigation Customs Karachi has submitted a report to the FBR about the FIR lodged against the mentioned group of companies.
The M/s HSJ Builders and Developers is a firm/association of persons comprising accused persons who are found to be involved in predicate offenses.
The facts revolving around the case are such that the same individuals operating and managing two sister entities, one of which is involved in the generation of proceeds of crime and the other placement and integration of such proceeds, through an un-registered and non-filer entity as an intermediary, the case falls within the ambit of the provisions of the Anti-Money Laundering Act, 2010.
The money laundering to the tune of over Rs. 3.5 billion has been committed by the said companies.
The report implicates the accused individuals in a money laundering offense. They allegedly used the “proceeds of crime” to fund the development and progression of a Karachi-based project, HSJ ICON. These funds, originating from HSJ Metals (Pvt) Ltd, should have been rightfully paid into the government exchequer, the report said.
The report further elaborates that individuals who are managing two interconnected entities are under scrutiny. One entity is implicated in the generation of crime proceeds, while the other is involved in the placement and integration of such proceeds.
This was done through an unregistered entity that does not file returns and acts as an intermediary.
Given these circumstances, the case comes under the purview of the Anti-Money Laundering Act 2010, the report said.
The investigation into the matter is underway to ascertain the role of other directors, partners, owners of the HSJ Group of companies, and their accomplices and facilitators.
Customs Intelligence has said that the entire operation led to money laundering amounting to Rs. 3.55 billion, including evaded duty/taxes, surcharge and goods value. Additional inquiries are being conducted to determine the involvement of the directors, partners, and owners of the two organizations identified so far.
Karachi’s Customs Intelligence Regional Office has lodged a First Information Report (FIR) against the culprits. The steel, initially cleared at the Hyderabad Collectorate, was later found to be used in a construction project in Karachi. The FIR was submitted before the special judge (customs, taxation and anti-smuggling) in Karachi.
As of June 30, 2023, the calculated surcharge amounted to a staggering Rs. 665.31 million, with the value of the cleared goods reaching Rs. 2.178 billion.
The report shows that, based on initial inquiries, the accused individuals committed the predicate offense by exploiting another company. This company was implicated in the illicit removal of 14,392 tonnes of iron and steel waste, scrap, and silico manganese from a private bonded warehouse.
A thorough stock-taking reveals that only 3,761 tonnes, along with an estimated remaining stock of 700 to 1,000 tonnes, were found. This is in stark contrast to the balanced quantity of 18,854 metric tonnes recorded on March 20, 2023.
The discrepancy indicates that the individuals implicated had illicitly removed 14,392 metric tonnes of in-bonded goods, valued at Rs. 2.17 billion, bypassing the requisite duty and tax payments.
