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Customs Intelligence Files Case Against Famous Karachi Developer Over Money Laundering

Customs Intelligence has filed a case before the Special Judge (Customs Taxation and Anti-Smuggling) against famous Muhammad Hanif Jewani, a famous builder and developer, on the allegations of money laundering.

According to a document, Customs Intelligence Karachi has made a unique case of money laundering of over Rs. 3 billion involving placement, mingling, layering of proceeds of crime and its integration in the economy.

Owners/directors/partners of a Group of Companies were involved in conspiring and then carrying out placement, parking and integrating proceeds of crime in a residential project known as “HSJ Icon” under the umbrella of a group entity/company “HSJ Construction”, which upon initial enquiry, was found to be neither registered with the Federal Board of Revenue (FBR) and nor is a tax-filer.

Therefore, it was in reality HSJ Builders and Developers which has launched and is constructing the said building. HSJ Builders and Developers is a firm/Association of Persons comprising of accused persons Muhammad Hanif Jewani and Ahmed Hanif Jewani, father and son respectively, who during preliminary investigation were found involved in the commission of, inter alia, predicate offence under Section 32 of the Customs Act 1969 punishable under clause (14) of Section 156(1) of the Act ibid.

It surfaced during initial enquiry that the aforesaid predicate offence had been committed by the accused persons through use of another company HSJ Metals Pvt. Ltd. which was involved in illegal removal of 14,392 MT of Iron and Steel waste and scrap and Silico-Manganese from the Private Bonded Warehouse Super Highway, Nooriabad.

As a result of stocktaking, only 3,761.89 metric tons plus approximately remaining stock of 700 to 1,000 metric tons were found available instead of balance quantity of 18,854 metric tons as on 20-03-2023, thereby establishing that directors of importer/licensee had unlawfully removed 14,392 metric tons of in-bonded goods valued at Rs. 2.17 billion without payment of duty/taxes to the tune of Rs. 716 million.

Proceedings were accordingly initiated for violation of the Customs Act, 1969 and Sections 3, 6, 33 and 34 of the Sales Tax Act, 1990 and Section 148 of the Income Tax Ordinance, 2001, on account of which subsequently under Order-in-Original N0. 33,023 dated 02-05-2023. The liability of the importer/licensee was held at Rs. 716 million in terms of evasion of duty/taxes along with default/additional surcharge to be calculated at the time of actual payment and personal penalty of Rs. 10 million.

That resultant recovery proceedings initiated under section 202 of Customs Act 1969 for Rs. 1.38 billion as of 30-06-2023 did not succeed due to the fact that the bank accounts of HSJ Metals Pvt. Ltd. had no funds whatsoever available in the said bank accounts.

It is reported that right up-to the time when the wrong-doing of the accused persons surfaced, they had been manufacturing Steel Bars which were sold in the market as well as used in the construction of HSJ Icon.

In this manner, the accused persons, other than using the Steel Bars made from non-duty/taxes paid Waste Scrap and Silico Manganese, also diverted the funds obtained from the sale of illegally manufactured Steel Bars towards the construction of HSJ Icon.

It is accordingly established that the accused persons are involved in the offence of money laundering by using the “proceeds of crime” by way of developing and progressing the project HSJ Icon from the funds of HSJ Metals Pvt. Ltd which should have been paid in the government exchequer, while at the same time receiving monies from the allottees of flats and shops in the project thus layering the scam in an organized manner.

The facts revolving around being such that the same individuals operating and managing two sister entities, one of which is involved in generation of proceeds of crime and the other in placement and integration of such proceeds, through an unregistered and non-filer entity as an intermediary, the case falls within the ambit of the provisions of the Anti-Money Laundering Act, 2010.

Accordingly, the modus operandi mentioned as above resulted in money-laundering to the tune of Rs. 3.5 billion (evaded duty/taxes of Rs. 716 million, surcharge (calculated up-to 30-06-2023) of Rs. 665 million and Goods Value of Rs. 2.17 billion) by Muhammad Hanif Jewani and Ahmed Hanif Jewani of HSJ Metals Pvt. Ltd, HSJ Construction and HSJ Builders and Developers, through commission of, inter alia, the predicate offence in terms of Section 32 of the Customs Act 1969 punishable under clause Section 56 of Customs Act. 1969 within the meaning of Sections 3 and 4 of the Anti-Money Laundering Act, 2010 read with Section-VI(e) of its First Schedule.

Source: Pro Pakistani