Battling Counterfeit

In June 2011, the Directorate of Revenue Intelligence (DRI) in Delhi intercepted a bus from Istanbul and recoveredRs15,44,6000 in counterfeit currency from the vehicle. The consignment was Lahore-based kingpin Iqbal Kana’s and was meant for Mohammad Anwar, a resident of Kairana, UP. The consignment had originated in Bangladesh. Two Turkish nationals, Huseyn Koroglu and Mehmat Kaya, were arrested.

On October 24, 2011, Patna police, along with the Special Task Force (STF), seized fake currency worth Rs 57,000 and apprehended four persons allegedly involved in printing fake notes. The involvement of ISI agents was brought to the fore with the arrest of one Pramod Kushwaha. He confessed he had links with a Pakistani national.

At the Kochi international airport, Rs 24 lakh in 

fake currency was seized from one K Gopinathan, who had arrived from the Gulf. The case was investigated by the Organised Crime Wing (OCW) of Kerala police. The agency suspected the hand of terror outfits behind the flow of currency notes.

On January 12 this year, the police arrested one person for allegedly circulating fake currency notes in the Jajpur Road area of the Jajpur district, Odisha. Six fake 500 rupee notes were seized from him. The arrested person was identified as Talim Sheikh of Murshidabad, West Bengal.

The fake currency menace has acquired the dimensions of a tangled nationwide web. Union finance minister Pranab Mukherjee admitted as much while inaugurating a new printing machine at the Bank Note Press in Dewas recently. 

Mukherjee said: "We are working on indigenising all material used for printing bank notes in the country.” He pointed out that "hostile countries" were generating fake Indian currency notes (FICN) and circulating them across the country.

Mukherjee was obviously alluding to Pakistan’s Inter-Services Intelligence (ISI), which is believed to be pumping large volumes of counterfeit currency into India with the aim of funding terror and sabotaging the country's booming economy.

In the five states where people are currently electing their representatives, several major seizures of currency notes have been reported. Informed sources suspect that all these notes are fake.

The Reserve Bank of India (RBI), the National Investigating Agency (NIA), DRI and other security agencies are understandably seized of the matter. They are seeking to put effective mechanisms in place to counter the problem. But the circulation of fake currency is showing no signs of abating.

Says K Jayaraman, DIG (operations) of CID, West Bengal: “We receive frequent RBI guidelines. Following a special training session last week, we have asked all nationalised banks in Malda and Murshidabad (Bengal's most vulnerable districts) to install ultraviolet checking machines for high value currency notes.” 

FICN smuggled in from Bangladesh has been seized as far adrift as in Kerala, where it made its way through migrant labourers from Bengal’s border districts. From Assam and other states of the northeast (Nagaland, Manipur, et al) FICN is being pushed into Myanmar by local insurgent groups.

It was once a small-scale operation driven locally by petty criminals. Today, it is a humongous cross-border international conspiracy with grave political and economic ramifications. An additional SP of CID, Assam says on condition of anonymity: "In some cases, fake currency has infiltrated leading banks. It's a serious threat to our economy."

The senior officer adds: "The quality of paper used for printing fake currency these days is so good that it is difficult to tell the difference. These fake notes are probably printed on revenue papers that have been lost from various places in India. A few years back, a bunch of revenue papers was stolen from Nasik.”

It is learnt that counterfeit currency is printed on security paper imported from London. Over the years, it has become increasingly difficult to distinguish it from original Indian currency because of the state-of-the art printing technology employed by ISI. Gone are the days when fake currency was printed by using scanners and computer printers.

Even bank officials sometimes fail to detect fake notes. In view of the gravity of the situation, it is mandatory now for all financial outfits and banks to submit counterfeit currency reports (CCR) to the Financial Investigation Unit (FIU) of the finance ministry. In its 2010-11 report submitted on January 16, FIU pointed out that the circulation of counterfeit currency has increased 400 per cent. In the last financial year, 4,23,539 cases were reported. The counterfeit currency seized was valued at Rs 35 crore.

That is only a small fraction of the Rs 1600 crore in fake currency notes that ISI has allegedly dispatched to India in the last year alone. FIU estimates that 60 per cent of fake notes that have entered the Indian banking system are in the denomination of Rs 500. 

CID sources claim that the existing legal provisions are riddled with loopholes. Bail comes easy to the arrested fake currency carriers as the law lays down that until and unless they are caught with machinery meant for manufacturing of FICN the offence is bailable. In Bengal, one Kanai Pal, who was arrested with a huge cache of FICN, got bail. “He vanished. We later came to know that he is operating from Karachi,” says a CID official.

Says the Kerala State Crime Records Bureau (SCRB) SP Raghu Varma: “There's no point in citing number of cases registered. It is important to start the trial in the remand period itself. Indefinite postponement of cases in courts is simply to benefit the culprits, lawyers and officers. I had filed a case in Kottarakkara when I was a CI. Now I am an SP and have been asked to appear for the same case. Why should cases drag on for 8-10 years when only eight months are needed?” 

Not that remedial measures have not been taken. In 2006-2007, after near-perfect clones of Indian currency notes flooded the country, the government put all notes printed pre-2000 out of circulation. The new high-value notes introduced in 2006 had several security features and faking them was almost impossible. One such added feature was the use of optically variable ink. The denomination (500 or 1000) was printed in the centre of the note. The ink was specially indented from the Swiss company, SICPA. The ink is expensive (Rs 3 crore per litre) but with one litre, millions of notes can be printed.

Indian intelligence agencies fear that ISI has been able to lay its hands on this ink, clandestinely procuring it from the same Swiss company. Besides, SICPA supplies optically variable ink to Pakistan as well for the printing of its currency notes.

That apart, five litres of this ink was stolen from a consignment from SICPA's Sikkim unit that was on the way to RBI’s note printing facility in Mysore. This theft was reported in August 2009. Soon after this incident, the volume of fake currency pouring into India shot up appreciably, strengthening suspicion that the stolen ink had ended up in Pakistan.

Intelligence sources point out that Pakistan’s Security Printing Press in Malir town, near Karachi, has set up a full-fledged unit for printing counterfeit Indian currency. The units are on Jinnah Avenue opposite Hotel Marriott Inn. The SICPA unit is located on the same street.

Sources say Iqbal Kana is the undisputed kingpin – he handles the bulk of the consignments and pumps them into India directly from Pakistan or via Nepal and Bangladesh.

Iqbal has been entrusted with the job of transporting fake currency notes to India. Although fake currency is sent to India through Nepal, Bangladesh and the Gulf countries primarily by Iqbal, these shipments finally reach Dawood’s syndicate for circulation across the length and breadth of India. 

Initially, Iqbal's fake currency consignments would be worth a few lakh rupees. Today, each sortie runs into many crores. His consignments usually end up in his native town, Kairana, where some residents and their family are hand-in-gloves with the fake currency kingpin.

Two recent seizures made by DRI and Delhi police reveal the magnitude of the counterfeit currency infusion masterminded by Iqbal. Intelligence agencies claim fake currency to the tune of more than Rs 10,000 crore is in circulation. RBI, however, does not endorse the figure.

Interrogation of the two Turks arrested in Delhi revealed that they were lured to Pakistan by an ISI agent Chetin Zyned on the promise that they would be introduced to a fake currency dealer in Lahore. The duo, Huseyn Koroglu and Mehmet Kaya, procured a carnet (permit to take their bus across borders) and drove to Lahore. From there, they went to Bangladesh via India armed with Iqbal Kana's mobile phone number. Once they reached Dhaka, they called Iqbal. The latter instructed the two Istanbul residents to head to a spot near the airport where a man named Abdullah would meet them. They were told to hand over the bus keys to Abdullah.

But as the consignment hadn't reached Dhaka, they had stay put in Bangladesh for a few days. After a brief trip back to Turkey to renew their visa, the duo returned to Dhaka. Abdullah told them that the consignment had been concealed in the bus and that they should call up Iqbal for further directions. Iqbal instructed them to reach Delhi by June 3, 2011.

DRI officials, who had specific information that the two men would be meeting an accomplice near Akshardham, waylaid the bus. After a thorough search, the sleuths found seven bundles of fake currency in a cavity in the cooling unit of the bus air-conditioner. Anwar, a resident of Kairana who was to receive the consignment, was arrested by DRI officials.

Earlier, in 2008, Anwar had been arrested by DRI in connection with a consignment of counterfeit currency. He had received the consignment under instructions from Iqbal. About six months later, Iqbal sent another consignment of counterfeit currency to Delhi via Jammu. It was worth Rs 2.24 crore, probably the highest ever-single seizure of counterfeit currency made by Delhi police.

Two persons, Zeeshan Khan and Ash Mohammad, were arrested. During interrogation, the police learnt that Ash Mohammad is Iqbal's nephew. Zeeshan Ali is the son of Mohd Hassan Khan, who lives in Lahore and works with Iqbal. On the basis of information provided by the arrested, two Jammu transporters Yakub Ali and Ghulam Mohammed were nabbed for ferrying the fake notes to Delhi after receiving them from Pakistan. The duo confessed that they received consignments through Rajouri and Poonch sectors.

But once again the police were unable to establish who the fake currency was to be finally delivered to. In a majority of seizures, the police nab the conduits but fail to reach the big fish. According to intelligence sources, a chunk of the counterfeit currency reaches members of the Dawood Ibrahim gang. Replying to a question in the Lok Sabha, the government revealed that till last October, over Rs 81 crore of the Rs 96 crore seized by RBI and the state police force was recovered in Maharashtra alone.

India's borders are notoriously porous. For instance, a solitary signpost marks the international India-Nepal boundary in Bihar. The border is largely unguarded and the people here are desperately poor. Cross-border smuggling, naturally, is rampant. Any contraband can make its way across the border with ease. DRI sleuths had, on December 2, 2011, seized FICN worth Rs 20 lakh in denomination of 1000 from a bus near Piprakaothi in East Champaran district on the Indo-Nepal border following a tip-off. An alleged smuggler, Ashraful Alam, a resident of Mohanpur village of Malda district in West Bengal, was arrested. He was allegedly smuggling the notes to East Champaran from Bangladesh.

The Bihar police chief Abhayanand says: "Circulation of FICN in the state has really become a challenge for the state police. We want to take more deterrent measures to curb it," he said. 

Taking advantage of political uncertainty in Kathmandu, ISI has set up a large network of agents from Kathmandu to Birganj and all along the border to push hundreds of crores of counterfeit Indian currency from Nepal to India.

Kerala, too, has been witnessing frequent seizures of fake currency. The total number of such cases recorded in 2011, as per SCRB, was 53. NIA is now investigating three major FICN cases. Besides the Taliparamba counterfeit currency case, the NIA has undertaken two major FICN cases, Karipur and Kochi seizures.

“An FIR has been filed at the NIA special court in Kochi and investigations are on," NIA superintendent of police Sunil Emmanuel told TSI. "NIA took up the cases only recently, Talipparamba in December and the other two, Karipur and Kochi, only a week ago. It is premature to come to any conclusion,” he added.

Of late, counterfeit notes reach Kerala not only from Pakistan, but also from Bangladesh. Thiruvananthapuram police seized fake notes worth Rs 2.19 lakh from eight Bengali migrants from Parassala in Thiruvananthapuram. It was reported that they were distributing fake currency brought to Malda from Pakistan via Bangladesh. Considering the national dimensions of the case, OCW referred the case to CBI for investigation.

The Organised Crime Wing superintendent of police in charge of Thiruvananthapuram, Kollam and Pathanamthitta districts G. Sreedharan, says, “Whenever a counterfeit currency case is reported, we immediately search the house of the accused, probe into his antecedents, enquire about him and his source of income and then only come to a conclusion. No innocent person is charged.”

CID officials in Kolkata say that due to the mounting pressure exerted by the Special Operation Group of CID, NIA and BSF, the FICN gangs also use air routes from Dubai and other parts of the Gulf, besides Nepal and Bangladesh. They prefer smaller non-metro airports like Ranchi, Patna, Pune and Benaras, where security checks are not so strict.

Matters have come to such a head that even sleepy Jajpur or Orissa isn’t safe. “Some locals may have a nexus with fake currency racketeers of Bihar and West Bengal, who have been circulating counterfeit currency notes in the rural areas of Jajpur district,” says Ashwani Kumar Sahoo, inspector in charge of Jajpur Road police station. The point of no return has been reached. No wonder the finance minister is a worried man.

With inputs from Chandrasekhar Bhattacharya in Kolkata, Sanjay Upadhyay in Patna, M. Rajasekhara Panicker in Kochi, Dhrutikam Mohanty in Bhubaneswar,

Rupraj Sarmah in Guwahati, Raju Kumar in Bhopal, Sujit Pandey &Vinod Sharma in Gorakhpur

Who is Iqbal Kana?

ISI operative Iqbal Kana, the main supplier of counterfeit Indian currency, operates from Lahore. He is a proclaimed offender.

Iqbal was a small-time vegetable vendor from Kairana near Muzaffarnagar, UP. His full name is Iqbal Malik. He is popularly known as Iqbal Kana since he has a defect in his right eye.

Iqbal took to crime in the early 1990s and joined hands with Hazi Anees of Kairana, a gold smuggler who was arrested at the IGI airport in 1982. The gang developed enmity with another gang of Kairana, who pushed drugs, arms and ammunition, besides smuggling gold.

In 1992, Iqbal married Mustari, a girl from Saharanpur. He has two daughters, Kausar and Khatija, both around 17 or 18 years of age.

In 1993 and 1994, he was targeted twice by members of the rival gang but he survived the attacks. In June 1995, he left for Pakistan and began living with his relatives in Lahore. His wife and two daughters joined him later.

Iqbal came into contact with Tariq, an ISI agent, a resident of 797, Yatimkhana Chowk, Lahore. Initially Tariq smuggled .30 bore Pakistani pistols, which were produced clandestinely in Darra area of Pakistan, to India. Iqbal’s gang members would dispose of the pistols in India quickly and ask for more supplies. In 1996, impressed by the vast potential of Iqbal's alacrity, Tariq came up with a plan to smuggle bulk quantities of firearms. 

Tariq and Iqbal lured a Swiss national, Christopher, who was in Pakistan with his caravan. Christopher was paid Pakistani currency worth 50000, besides 50,000 Indian rupees as journey expenses. He was to be paid $35000 after delivery of the shipment.

But the special cell of Delhi police intercepted the shipment on February 17, 1996. This was one of the rarest of rare hauls of arms and ammunition. Among the seized pieces were 361 automatic .30 bore pistols, 369 spare magazines and 3738 rounds of live cartridges. Although Christopher and his accomplice Hassan Poddar were arrested, the police could nab only a few members of Iqbal’s gang. The others were declared proclaimed offenders in the case by the court.

Hassan Poddar, a Pakistani national, was promised Rs 1000 per pistol by Tariq. Incidentally, Tariq, who had come to India and was staying with Hazi Anees to supervise sale of the consignment, made good his escape.

Iqbal carried on with pushing drugs, firearms and fake currency into India. Around the year 1999, he was tasked with a very important assignment of inducing Indians into spying for Pakistan. Iqbal started running a well-entrenched espionage racket with the help of Samayuddin, a Kairana resident. He was caught from the Samjhauta Express by the special cell of Delhi police in December 2001.

The police recovered a diary from Samayuddin, popularly known as Hazi. He had in his possession documents relating to the movement of Indian troops and military training along with the contact numbers of several important officials of the Pakistani embassy in Delhi. 

Again in January 2002, another person, a former General Reserve Engineering Force (GREF) man who was in cahoots with Iqbal, was arrested by the police for spying for Pakistan. The 56-year-old man, Mohammed Islam, had been employed with GREF as a telephone operator.