Customs Intelligence has unearthed an elaborate scheme by a syndicate to import consumer goods in the name of capital machinery in an operation that cut through duty evasion, money laundering and fraud.

Using fake documents and addresses, consumer goods worth Tk 1,040 crore were allegedly brought into the country from China, according to the Customs Intelligence and Investigation Directorate.

The syndicate had laid the plan to import the items in 90 containers in favour of two firms that do not exist and even succeeded in bringing 78 of them. The last 12 containers got caught by the CIID in March this year.

The 12 containers had cigarettes, LED television, old photocopiers, alcohol and powdered milk, the value of which was Tk 138 crore, according to the CIID.

The CIID assumed the containers that got away had similar inventory and thus were worth Tk 1,040 crore, including duties and taxes.

But only Tk 3.47 crore was sent through the legal banking channel with a view to importing machinery for poultry feed mills, meaning the rest of the amount was sent through hundi, an illegal channel of sending money, according to the detective office under the National Board of Revenue.

The CIID suspects as much as Tk 267 crore has been siphoned off abroad because of false declaration of goods.

Analysts have been raising questions over the huge rise in import of capital machinery for the last few years and this was a case that supports their claim.

Bangladesh Bank data shows the imports of capital machinery increased by a whopping 44.21 percent to nearly $4.5 billion (based on LC settlement) during the July-May period of fiscal 2017 compared to the same period a year ago.

Detectives found that the containers were imported by two firms: M/S Henan Anhui Agro LC of Khilkhet and M/S Agro BD & JP of Keraniganj.

The importers had opened letters of credit with the IFIC Bank's Naya Paltan branch using fake addresses and photos.

A person named Abdul Motaleb, hailing from Patira under Dumni union of Khilkhet, Dhaka, was shown as the owner of the importing firms.

But a photo of a person named Khorshed Alam was used as Motaleb to open the LCs at IFIC. The CIID said fake information was given in the Know Your Customer (KYC) form to open the bank account.

Fake trade licences were also used to get VAT registration, the CIID said in a letter dated June 30.

“Massive forgery took place in preparation of documents for opening accounts and LCs,” the CIID said in the letter, while hinting at negligence in duty on part of IFIC Bank's senior officials.

The clearing and forwarding agent was shown to be Rabeya & Sons; the detectives could not find the office of Rabeya & Sons. The C&F agent got its licence from Jessore but an address in Chittagong was used in the import documents.

Henan Anhui Agro and Agro BD & JP got their VAT registration as suppliers and importers.

But in the papers submitted to the Chittagong customs office, the importing firms were shown as manufacturers to justify declaration of imports of capital machinery.

Detectives also found negligence in discharging duties by officials at the Chittagong Customs and Chittagong Port during the delivery of import consignments.

Had the customs officials in charge of valuation of import consignments examined the authenticity of VAT-related documents, the forgery would have been detected then and the imports could not have taken place, they said.

Not only that, the consignments were delivered without mandatory scanning or physical inspection.  

“There is an indication of organised crime. It is not possible to do such a big fraud to smuggle goods without the involvement of some officials,” according to the letter.In-depth probe can be undertaken to identify the officials and take legal measures, it said.

Customs intelligence also recommended taking actions against the C&F agent Rabeya and Sons as per rule. 

“We will file several cases related to money laundering and customs law violation after getting approval from the higher-ups,” said CIID Director General Moinul Khan.

Contacted, IFIC Bank Deputy Managing Director and Head of Business Shah Md Moinuddin said the two firms had opened 17 LCs at the bank's Naya Paltan branch. The value of the LCs was Tk 3.72 crore ($464,546).

Of the LCs, the bills of entries were submitted to the bank against 15 LCs after clearing imported goods from customs, he said, adding that the items and harmonised system codes mentioned in the bills of entries matched with the items mentioned in the LCs.

Later, all the information related to the LC settlement was sent to Bangladesh Bank, Moinuddin said, adding that the payments for two LCs were not given because of allegation of irregularities.

“So, no incidence of laundering a thousand crore taka took place through IFIC Bank.”

On negligence on the part of the bank regarding the KYC form, he said four officials including the branch manager have been suspended temporarily for fair probe by the bank.

“Administrative and legal proceedings are going on now,” he added.