Massive Liquor Smuggling Racket Exposed: ED Finds Inter-State Hawala Trail, 19 Accused in PMLA Case

Staff Reporter

Guwahati: The ED (Directorate of Enforcement) found hawala transactions in the clandestine manufacture and large-scale smuggling of liquor from Arunachal Pradesh into Assam.

The Directorate of Enforcement (ED), Guwahati Zonal Office, has filed a prosecution complaint under the provisions of the Prevention of Money Laundering Act (PMLA), 2002, against 19 accused persons comprising Sanjay Dewan, Niraj Sharma, Rajan Lohia, Shankar Deb, and Sameer Mehta and 14 associated Bonded Warehouse entities.

The ED conducted a search and seizure operation across multiple premises in both states, resulting in the recovery of incriminating digital and physical records. Forensic extraction of the seized mobile device revealed a highly active inter-state hawala transaction network. The syndicate utilized camouglage codes such as 'Books', 'Box' 'KG', 'Bag' etc., to denote lakhs of rupees and exchanged image of low denomination currency notes along with their uqique serial numbers to serve authenticationtokens for the receipt of illicit cash from illegal liquor sales from locations like Guwahati, Delhi, Ranchi, and Hyderabad through Hawala nextwork into Arunachal Pradesh for deposit in the bank accounts of the liquor wholesalers.     

ED initiated the money laundering investigation based on 173 FIRs registered by the Assam Police across various bordering districts along the Assam-Arunachal Pradesh border. The money laundering investigation revealed a massive, organised, and vertically integrated criminal enterprise engaged in the clandestine manufacture and large-scale smuggling of liquor from Arunachal Pradesh to Assam. The smuggled liquor had labels saying "For sale in Arunachal Pradesh", but it was moved without the proper transit permits or Excise Verification Certificates (EVC) to avoid the much higher excise duty and Value Added Tax (VAT) in Assam.

According to the combined reports from the Assam Excise authorities, more than 2.63 lakh bulk litres of this smuggled liquor, worth about Rs. 52.77 crore, were seized in Assam during 739 different incidents from January 2023 to April 2026, which is only a small part of the total amount of smuggled liquor.

The PMLA investigation established that the three principal accused, namely, Sanjay Dewan, Niraj Sharma, and Rajan Lohia, had a virtual monopoly over the liquor trade in Arunachal Pradesh through a complex web of liquor businesses involved in warehousing, wholesaling, and retailing liquor.

In gross violation of Arunachal Pradesh state excise policies, the accused unlawfully took over statutory licences that were originally issued to local indigenous residents, without any prescribed approval from the district as well as the excise authorities. These local residents were used merely as proxy name-lenders and were paid small, fixed monthly remunerations. The accused retained absolute beneficial ownership and financial control over the entire chain of manufacturing units, bonded warehouses, and wholesale vendors through unapproved agreements, reducing the official licence holders to mere dummies on paper. The accused further relied on the use of dummy directors in their entities. Their primary function was to follow orders and sign blank cheques. Apart from the above, the manufacturing units systematically escalated their installed capacities without corresponding duty payments, creating a massive surplus of unaccounted liquor intended strictly for smuggling.

The illicit cash generated from the retail sale of the smuggled liquor in Assam was integrated into the formal financial system through a meticulous four-tier laundering mechanism:

Firstly, the unaccounted physical cash was placed into the bank accounts of wholesale entities, mostly through the hawala movement of cash into Arunachal Pradesh from Assam and other parts of the country. To avoid legal limits on cash transactions and to escape bank checks, the group used a method of splitting invoices, creating thousands of invoices that were kept under Rs. 2,00,000 and making cash deposits just under the Rs. 10,00,000 reporting limit. The banking analysis revealed that nine wholesale entities received huge cash deposits aggregating approximately Rs. 1,047.93 crore, with the 'proceeds of crime' quantified from these deposits.

The funds were then sent through organised RTGS and NEFT transfers to 14 bonded warehouses owned by the accused in the complaint. Funds were further consolidated at the manufacturing tier from the bonded warehouses.

The laundered money was eventually taken in as "profit shares" and clean income, moved to personal and HUF accounts, and used to buy movable and immovable properties owned by the accused and their related businesses.

During the targeted search operations, the ED seized unexplained physical cash amounting to Rs. 52.10 lakh. Furthermore, bank balances and fixed deposits amounting to Rs. 26.59 crore maintained across various financial institutions were frozen under the provisions of the PMLA. The retention of these assets has been confirmed by the Adjudicating Authority (PMLA), New Delhi.

The investigation was also independently corroborated by previous findings of the Income Tax Department, where the principal accused had made voluntary disclosures of vast undisclosed incomes, affirming their controlling roles and systematic tax evasion. Further investigation is in progress.

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