Kolkata Police arrest middleman Govind Agarwal

In a massive breakthrough, the Kolkata Police on Sunday arrested dubious accountant Govind Agarwal in a case related to setting up hundreds of shell companies to launder the alleged "ill-gotten" wealth of multiple senior revenue officials (both current and retired), based on long-running investigations against Agarwal by multiple central agencies.

Interestingly, Agarwal had been accused by the Central Bureau of Investigation in the Rose Valley Chit Fund case and by the Enforcement Directorate in a money-laundering case related to controversial IRS officer Neeraj Singh.

Significantly, the Kolkata Police have arrested Agarwal in the 2017 case where Singh has also been named as an accused. Based on seizures from raids at premises used by Agarwal in Kolkata, the police had recovered hordes of sensitive and confidential documents belonging to the Income Tax Department, CBI, Financial Intelligence Unit, Directorate of Revenue Intelligence and others, leading to questions of how a low-profile accounts manager had access to such documents.

Sources aware of the investigations against Agarwal told Millennium Post that once central agencies had taken over the Kolkata Police FIR and examined Agarwal multiple times and raided multiple locations in connection with the money-laundering case, a large part of the findings was shared with the city police, who then took the probe forward.

The Kolkata Police was then made aware that Agarwal was handling the finances of at least 10 senior central agency officials, which included a former Chief Vigilance Commissioner, a former member (Investigation) CBDT, an Ex-DG (Investigation) posted in Kolkata and at least five other Commissioners/Chief Commissioners of Income Tax.

Furthermore, before Agarwal's arrest, the Kolkata Police had also raided premises of three chartered accountants namely Santosh Chaudhury, Pradeep Agarwal and Naresh Agarwal, based on which sources say police believe the racket could go into the hundreds of crores, involving alleged kickbacks received by the government officials.

Agarwal — a 12th fail — had such clout in bureaucratic circles that he had entered restricted sections of the Netaji Subhas Chandra Bose International Airport more than 100 times using a daily permit issued by the Air Intelligence Unit of the I-T Department under his name.

Agarwal's job in the racket was simple — if tax officials conducted raids or started any serious investigation, the accountant would broker a deal to settle the case and accept kickbacks on behalf of the concerned public official, which he would then launder through his web of paper companies. One senior official said such payments to the civil servants were part of the racket and were laundered with extreme care to avoid detection, with complex layers of structuring that veiled the money-trail.

Officials with direct knowledge of the matter said several private entities that were under the scanner of probe agencies would pool their resources, earmarked for pay-offs in a host of shell companies — run and operated by the likes of Agarwal. The accountant would then bounce the money across the paper concerns through fictitious transactions to finally reach the end benefactors — in this case, senior revenue officials.

The ED has already attached assets worth Rs 3.88 crore belonging to a now-suspended Neeraj Singh and alleged that these were part of kickbacks received by him from HM Diwan Jewellers through Agarwal. HM Diwan was also raided by central agencies.

According to the initial probe by the Kolkata Police's Anti Fraud Section, which set the ball rolling, seizures from Agarwal's "official" premises in North Kolkata had shown he was operating at least 98 shell companies with rubber stamps and other documents recovered. In fact, further probe by Millennium Post had found many companies registered to Agarwal or linked to him had the same address - the same room, on the same floor, of the same building. When asked about these companies, some of which include Lilac Suppliers, Tobu Engineering and Essencia Beverages, security guards in the building told investigators from the I-T department that they knew of no such companies operating from the building.

What is interesting is that the investigation involving these senior revenue officials, Agarwal, Neeraj Singh and others, is to a large extent, being conducted by central probe agencies who later shared the evidence with local police here, following which the probe was carried ahead by the Kolkata Police.