Mar 11, 2022

What is Money Laundering and What Role Does ED Play?

In the most recent development in the case of Sushant Singh Rajput’s death, the Enforcement Directorate (ED) has launched an investigation into the allegations of money laundering against Rhea Chakraborty and her family. So far the ED has summoned many involved, including Rhea Chakraborty and Shruti Modi (Rajput’s former business manager).

This probe by ED differs from the one already being conducted by Mumbai Police in terms of the kind of offences being investigated. While Mumbai Police is conducting an investigation on the death of Sushant Singh Rajput, ED is specifically looking into the mishandling of funds and financial dealings of the late actor. 

In this context, let’s understand what exactly the Enforcement Directorate is and what money laundering entails. 

Enforcement Directorate (ED)

The ED is a financial investigation agency that comes under the Department of Revenue of the Ministry of Finance. It has the power to investigate economic offences in India, specifically dealing with violations of the Foreign Exchange Management Act, 1999 and Prevention of Money Laundering Act, 2002. 

The ED also processes cases of fugitive economic offenders to ensure they do not evade the process of law in India by staying outside the jurisdiction of Indian courts. 

Some of the other famous cases of economic offences that ED has been investigating have been that of Nirav Modi and Vijay Mallya. 

What is Money Laundering?

Colloquially speaking and as the name suggests, money laundering is the laundering of black money into white, i.e. showing money or property earned from criminal activity as untainted or clean money. 

The law governing money laundering is called the Prevention of Money Laundering Act, 2002. According to this law, money laundering includes activities or processes involving money earned from criminal activity or any proceeds of crime. These activities include the concealment, possession, acquisition and/or use of such money or proceeds. It even includes projecting or claiming such money or proceeds to be untainted. 

If you directly or indirectly attempt to indulge in such activities or even knowingly assist or take part in such activities, you are committing the offence of money laundering.

If convicted with the offence of money laundering, you can be punished with imprisonment anywhere between 3 and 7 years, along with a fine. But if you are convicted of money laundering in relation to narcotic drugs and psychotropic substances, the imprisonment can be extended up to 10 years.

Related Weekly Posts

March 06 2022

Did you know: Intent is key in sexual assault cases

The Delhi High Court convicted three men of sexual assault and held that improper investigation was not a ground for diluting the prosecution’s case. Are there any crimes that particularly protect women? There are several offences which are only punishable when committed against women, such as: Acid attacks Sexual harassment at the workplace Voyeurism  Rape […]
Read More >

March 11 2022

Transferring a criminal case: The power of the Supreme Court

Earlier this year, Bollywood actress Rhea Chakraborty had asked the Supreme Court to transfer the FIR filed against her in the Sushant Singh Rajput death case. The FIR was filed by Sushant’s father at Patna. The actress wanted the Court to transfer the criminal complaint from Patna to Mumbai, where the police are already investigating […]
Read More >

February 23 2022

The Curious Case of Stan Swamy: Prisoners’ Rights in India

The National Investigation Agency (NIA) has told the special NIA court that they do not have a straw and sipper to give to 83-year-old Father Stan Swamy. On November 6, Swamy sought permission to allow him a straw and sipper in Taloja Central Jail as he suffers from Parkinson’s disease and cannot hold a glass. […]
Read More >

February 26 2022

Did you know that filing a fake case could cost you almost a lakh in fines?

The Punjab & Haryana High Court imposed a fine of Rs. 1 Lakh on a woman who filed a fake rape case and asked the CBI to start a probe for the same. The Court said that such frivolous cases are not only an abuse of the process of law but also an attempt to […]
Read More >