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Former Jharkhand Minister Becomes The First To Be Convicted Under Prevention Of Money Laundering Act

12 years after the act was enforced.

31/01/2017 2:18 PM IST | Updated 31/01/2017 2:51 PM IST
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RANCHI -- In the first money laundering conviction in the country, former Jharkhand Minister Hari Narayan Rai has been sentenced to seven years rigorous imprisonment and fined Rs 5 lakh by a special court here.

The maiden conviction, ordered yesterday by the court of Special Judge B K Tiwari, has come after the Prevention of Money Laundering Act (PMLA) was enforced 12 years ago and it saw Rai, former state Chief Minister Madhu Koda's cabinet colleague, being convicted for laundering funds to the tune of over Rs 3.72 crore.

The case pertains to the money laundering probe involving Koda and others and was unearthed by the agency in September 2009 in which a number of arrests were made and assets worth hundreds of crores were attached.

"Rai, as Minister in the Jharkhand government, during the period 2005-08 laundered his illegal income through purchase and acquisition of various assets by misappropriation of public money and using the same for his personal benefits," the Enforcement Directorate said in a statement issued after the order of conviction.

Rai, elected as an MLA from the Jarmundi Assembly seat in Dumka district, held Cabinet portfolios like that of Tourism Development, Urban Development, Rural Works and Forests not only in the Koda cabinet but also in the government of former CM's like Arjun Munda and Shibu Soren.

"Rai has been pronounced guilty under section 3 (offence of money laundering) read with section 4 (punishment for money laundering) of the PMLA and has been sentenced to 7 years Rigorous Imprisonment, the maximum under the said Act, and has been additionally fined Rs 5 lakh. If the fine is not deposited, the order directed Rai to undergo another RI of 18 months. The court found him guilty for laundering proceeds of crime to the tune of Rs 3,72,54,016," the agency said.

Calling it a "historic judgement", ED Director Karnal Singh told PTI that the agency will "continue its sustained action against money launderers as such entities work against the nation and the society."

"ED is committed to take action against the persons involved in money laundering," the ED chief added.

A senior official said: "This is the first conviction under the PMLA in the country which was enacted in 2002 and implemented from 2005 in order to check and curb black money and grave financial crimes."

The ED had taken over this case in September, 2009 after taking cognisance of Jharkhand Vigilance Bureau's FIRs in the case and had filed three charge sheets in the case since then.

The CBI too probed the case under various sections of IPC and Prevention of Corruption Act.

ED said its probe found that Rai "established a construction company under the name Ms Mahamaya Construction Private Limited in the name of his wife Sushila Devi and others, Ms Maa Gauri Construction in the name of his brother Sanjay K Rai and others and also established Ms Baba Basuki Dairy Firm in the name of his wife and brother and laundered huge money in the name of the said companies/firms and projected them as untainted money.

"Rai had also transacted huge amount of money with his wife and his brothers Sanjay K Rai, Dev Narayan Rai and projected them as untainted money," it said.

Apart from filing three charge sheets in this case, the trial was completed in September last year and the arguments ended on January 16 earlier this month after which the conviction order against Rai was made by the local court here.

ED is the central agency to enforce the PMLA in the country.

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