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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.