Authorities from Indian and Hong Kong customs recently joined forces to expose a series of money-laundering schemes associated with synthetic diamond imports being misrepresented as genuine diamonds. The Ministry of Finance confirmed this revelation in a statement, highlighting the exemplary bilateral cooperation between both countries in uncovering trade-based illicit activities.
According to ET Bureau’s report, the Indian Directorate of Revenue Intelligence (DRI) played a crucial role in the investigation. Initially, the focus was on the misrepresentation of synthetic diamonds as authentic ones, but as the inquiry progressed, it revealed a more intricate fraudulent network. In a significant breakthrough, four individuals were arrested in both India and Hong Kong.
The DRI investigation began after uncovering cases of synthetic diamond imports being overpriced, facilitating the illegal transfer of funds from India to Hong Kong in early 2023. However, it was soon realized that this deception served as a cover for a more extensive illicit operation, with the mastermind situated in Hong Kong.
Interestingly, while inflated import values were funneled out of the country through banking channels, the funds received for exports were minuscule, accounting for only about 0.2%. This significant disparity strongly indicates that the diamond trade was a front used to launder illicitly obtained money overseas.
