ED Cracks Down On Alleged Areca Nut Smuggling Racket, Raids Multiple Locations In Mizoram

The Directorate of Enforcement (ED) on Thursday carried out searches at nine locations in Champhai, a key border town along the India-Myanmar frontier in Mizoram, as part of a money laundering investigation linked to an alleged large-scale illegal areca nut (supari) smuggling network operating across the international border.

According to information accessed by CNN-News18, the searches were being conducted under the Prevention of Money Laundering Act (PMLA), 2002, following findings that point to a well-organised cross-border syndicate involved in the smuggling of dry areca nuts from Myanmar into India.

Investigators suspect that the network relied on fraudulent e-way bills, forged documents and local “front claimants” to facilitate the movement

of consignments and generate proceeds of crime worth hundreds of crores of rupees.

The raids covered multiple premises in Champhai, including locations linked to local facilitators and traders allegedly connected to the smuggling network.

According to the details, the ED’s money laundering investigation originates from an FIR registered by the Anti-Corruption Branch (ACB) of the Central Bureau of Investigation (CBI), Imphal, on August 7, 2024.

The FIR was filed pursuant to directions issued by the Gauhati High Court in response to a PIL that had alleged widespread smuggling of Myanmar-origin areca nuts through Champhai and raised concerns about large-scale irregularities in the issuance of e-way bills used for transportation of the consignments.

Investigators found that between 2021 and 2024, fraudulent e-way bills worth Rs 251.19 crore were allegedly issued through the Mizoram State GST system, while another Rs 86.25 crore worth of e-way bills were generated through the Central GST Department.

According to the allegations, these documents enabled the transportation of smuggled areca nuts outside Mizoram under the guise of legitimate local trade.

The probe further noted that local plantation owners whose names were allegedly used in the process were not registered under GST, raising suspicions regarding the authenticity of the transactions.

Since the predicate offences involve allegations of cheating, forgery and criminal conspiracy under Sections 120B, 420, 467 and 471 of the Indian Penal Code, which are scheduled offences under the PMLA, the ED subsequently initiated a money laundering investigation to trace the financial trail behind the alleged operation.

HOW THE ALLEGED SMUGGLING NETWORK OPERATED

According to details accessed by CNN-News18, investigators have uncovered what they describe as a structured and coordinated smuggling mechanism stretching from Myanmar into mainland India.

The alleged operation began with suppliers in Myanmar transporting dry areca nuts across the Tiau River and through porous stretches of the border near Zokhawthar and Champhai.

Authorities allege that the consignments entered Indian territory without undergoing customs clearance.

Once the goods crossed into Mizoram, local facilitators allegedly received and consolidated the consignments before storing them in several small godowns located across Champhai.

Investigators say the consignments were then transported through organised logistics networks from Champhai towards Vairengte, near the Assam-Mizoram border. Specialised “escorters” were allegedly deployed to oversee and facilitate the movement of the goods.

ASSAM-BASED FINANCIERS UNDER SCANNER

The ED is also examining the financial structure underpinning the alleged smuggling operation.

According to the details, traders and financiers based in Silchar and other parts of Assam allegedly financed the procurement and transportation of the areca nuts.

Large sums of money were reportedly routed into the bank accounts of local Mizo facilitators, who earned commissions ranging between Rs 2 and Rs 15 per kilogram for handling the consignments.

Investigators suspect that these transactions were used to conceal and layer proceeds generated through the illegal trade.

ALLEGED USE OF LOCAL ‘FRONT CLAIMANTS’

Another key aspect of the investigation relates to the alleged use of local individuals as “front claimants” whenever consignments were seized by agencies such as the Directorate of Revenue Intelligence (DRI) or Customs authorities.

According to the findings, local Mizo individuals were allegedly positioned as claimants for the seized consignments.

They would then submit unrelated historical Bills of Entry (BOEs) and allegedly fabricated invoices in an attempt to establish ownership of the goods.

Investigators believe the arrangement was designed to exploit procedural advantages in customs proceedings and facilitate the provisional release of perishable consignments.

The probe has also revealed that payments ranging from Rs 20 lakh to more than Rs 1 crore were allegedly routed to manage customs release processes, penalties and related legal proceedings.

PREMISES OF LOCAL FACILITATORS SEARCHED

Sources told CNN-News18 that among the locations searched on Thursday were premises linked to several entities and individuals allegedly involved in facilitating the movement of smuggled areca nuts.

The searches covered residences associated with the proprietor of M/s Rem Rem & Beki Store, M/s SNV Store, M/s CS Store and M/s Mami Store, among others.

Investigators suspect that these entities functioned as local facilitators that received areca nut consignments entering Mizoram illegally from Myanmar.

The goods were allegedly shown as locally procured products before being sold to a larger upstream network that controlled the broader cross-border trade.

ED EXAMINING DOCUMENTS, FINANCIAL RECORDS

Officials are currently scrutinising financial records, banking transactions, ownership documents and other materials recovered during the searches.

The ED is expected to examine whether proceeds generated from the alleged smuggling operation were laundered through legitimate businesses and financial channels.

The investigation remains ongoing, and further action is expected based on the evidence gathered during the searches.