The ED conducted the sample study as a risk assessment exercise focusing on cases booked by the agency post demonetisation between November 2016 and September 2017. It found that frauds and cheating were the two major threats to the Indian economy while the proceeds of crime were laundered through financial institutions using shell companies and investments in real estate.
The vicious circle of illegal wealth is not only involved in domestic circular trading but has moved out of Indian borders. Banking channels are used and remittances are made using shell companies to avoid compliances. Such activities are known as trade based money laundering,” the study said expressing concern on how regulatory mechanism has failed to curb generation of black money.