Ahmedabad/Surat: The Directorate of Revenue Intelligence has uncovered a massive alleged ₹2,000 crore diamond hawala and money laundering network operating out of the Surat Special Economic Zone. Acting through its Vadodara/Vapi unit, the agency has arrested the main accused, Montu Harshadbhai Gandhi, from Navsari.
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Diamond Values Allegedly Inflated in Export Records
Officials allege that the accused imported low-quality diamonds and artificially inflated their value multiple times in export documents to illegally avail government incentives. The scheme is believed to have been designed to exploit benefits under “Make in India” and SEZ promotion policies, including tax exemptions and subsidies.
According to investigators, the value of imported diamonds was allegedly inflated by nearly 50 times while preparing export invoices. DRI officials stated that the accused operated through multiple companies using dummy partners and shell entities to run the fraudulent network across different layers of trade and documentation.
During questioning, one associate reportedly admitted that he was only a paper partner, while all financial transactions and dealings with foreign buyers were controlled entirely by the main accused. Raids conducted across multiple premises led to the seizure of crucial documents and digital evidence, including transaction records and communication logs.
Export Incentives and Foreign Transactions Under Probe
Preliminary findings suggest that the scale of the scam could exceed ₹2,000 crore. Officials suspect that through systematic overvaluation, the network not only claimed export-linked benefits but also violated foreign exchange regulations and customs compliance norms.
The DRI has produced the accused before a Surat court and secured a three-day custodial remand for further interrogation. Investigators are now conducting a detailed analysis of bank records, international transactions, email exchanges, and cloud-based data storage linked to the accused and associated firms.
Authorities are also probing whether foreign-based buyers and intermediaries played a role in facilitating the alleged fraud. Early reports suggest that several export transactions were intentionally over-invoiced to claim undue refunds, duty drawbacks, and incentive payouts.
Officials noted that such fraudulent valuation practices cause significant losses to public revenue and distort fair competition in legitimate trade sectors. The Surat SEZ authority has also begun an internal review of firms linked to the case and their export documentation history.
Money Trail and Shell Firms Being Examined
Investigators have identified suspicious banking channels where funds were allegedly routed through multiple layers to obscure their origin and destination. Mobile call records, encrypted chat histories, and digital communication trails are also under forensic examination.
Experts in financial crime and trade compliance have pointed out that diamond valuation is a highly sensitive process, where even minor manipulation can lead to large-scale economic offences. They added that such cases often rely on complex networks of shell firms, proxy directors, and layered financial routing.
