Mumbai: Income Tax department raids 3 gold shops in Zaveri Bazaar for DeMo fraud

On Nov 9, mid-day broke the story about gold fraud
On Nov 9, mid-day broke the story about gold fraud

The Income Tax (I-T) department yesterday raided three jewellery stores and bullion traders in Zaveri Bazaar and Kalbadevi following a tip-off that they were allegedly selling gold in exchange for the scrapped Rs 500 and Rs 1,000 currency notes. The gold was sold at inflated rates and officials estimate that the illegal transactions are valued over Rs 80 crore.

The raids were continued late into the night. An I-T official said the raids were carried out by dozens of I-T officials at Chenaji Narsingh on Mumbadevi road, Shree Dev Bullion in Kalbadevi and Shree Mandev Bullion in Zaveri Bazar. The tip-off was received from banks, which observed suspicious transactions that traced back to the shops.

The day after the demonetisation announcement, mid-day had broken the story on jewellers who made the most of the public panic and sold gold at exorbitant rates to people in exchange for the old notes ('Last night we were all black', Nov 9). Bank accounts of employees were allegedly used to convert this black money into white.

During the raids, many incriminating documents were seized. The I-T department is also preparing a list of people who bought gold in large quantities from these traders in exchange for old notes. More such raids are expected in the coming days.

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