Elaborate international money laundering network exposed in Andhra liquor scam

Hyderabad: The Special Investigation Team (SIT)'s probe into the alleged liquor scam during the YSRCP rule in Andhra Pradesh has revealed an intricate web of financial crimes extending to multiple countries.

The investigation established that Kesireddy Rajasekhar Reddy, former IT advisor to the chief minister and prime accused in the scam, along with co-conspirators, systematically established multiple startup companies using crime proceeds.

The accused acquired existing entities and founded new ventures across diverse sectors, including electric vehicles (EV), pharmaceuticals, logistics, and other emerging industries, all funded through illicit proceeds.

The SIT discovered that research expenses, operational costs, and employee salaries for these startup ventures were funded entirely or partially through money generated by the liquor kickback scheme.

In a particularly striking revelation, the key conspirators established a private network targeting young graduates, including several from the Indian Institute of Technology (IIT).

These graduates were recruited as collection agents and 'mules' for making Voice over Internet Protocol (VoIP) calls through impersonation, lured by promises of white-collar jobs in companies floated by the accused.

They utilised sophisticated hawala channels in Dubai and Thailand to launder money while formulating plans to establish mining businesses in African countries, specifically Zambia and Tanzania.

Evidence indicated that Rajasekhar Reddy and another accused, Kiran Kumar Reddy, personally purchased luxury cars worth several crores using these crime proceeds.

The investigation also uncovered that Rajasekhar Reddy operated a film production company named 'ED Entertainments'. While the company officially produced movies, multiple testimonies revealed that declared production budgets were approximately double the actual payments made through official bank channels, indicating clear layering and laundering of illicit funds, according to an SIT source.

According to the chargesheet, the liquor syndicate operated under the direct control of Kesireddy Rajasekhar Reddy and his associates, systematically conducted illicit financial activities from Dubai.

The investigation revealed through statements and corroborating evidence that substantial portions of liquor kickback proceeds were illegally routed to Dubai through clandestine hawala channels to circumvent domestic banking regulations and launder crime proceeds outside India.

“This chain of events and financial trails demonstrates a premeditated conspiracy to divert and conceal illicit funds offshore using underground hawala networks, thereby facilitating the laundering of kickbacks generated through liquor syndicate operations,” an SIT official explained.