The FinCEN Files contain a 20-page “intelligence assessment” on the mirror network and list 54 shell companies which, they say, moved billions of dollars annually from Russia through European securities markets to other jurisdictions beginning as early as 2011.

In 2014, the Dubai-based Kaloti Jewellery Group, one of the largest gold traders and refiners in the world, was indicted as a key cog in the dirty gold trade buying the precious metal from those suspected of money laundering, by a

US Drug Enforcement Administration-led task force.

At around the same time, as many as 152 transactions of Indian companies with Kaloti were red-flagged as suspicious to US Treasury’s Financial Crimes Enforcement Network (FinCEN), according to Suspicious Activity Reports, or SARs, investigated by The Indian Express. These were obtained by BuzzFeed News and shared with International Consortium of Investigative Journalists and 108 media partners as part of the ongoing FinCEN Files investigation. The SARs highlighted that many of these Indian firms had nothing to do with the gold business and one of them, records show, figures in the list of top bank-loan defaulters released by the RBI last year.

Consider the key Kaloti transactions with Indian links:

Three SARs were filed by Deutsche Bank Trust Company Americas (DBTCA) red-flagging 55 transactions, between February and September 2013, in which Kaloti received $47.96 million from Delhi-based Met Trade India Limited, now called Metenere Ltd. The SARs cited examples of “several large round dollar transactions,” same-day payments on four occasions; payments for “gold trading” despite the fact that Met Trade makes no mention of gold in its operations

An SAR filed by The Royal Bank of Scotland, Connecticut, on October 1, 2013, cited Jai Gurudev Industries & Warehousing, one of the companies of Mumbai-based Rajsi Group that includes Amico Pharma, General Export Enterprises and Rajsi Bros. According to the group’s website, Jai Gurudev is into “export commodities of sugar, rice, wheat flour, Indian yellow maize, jowar, bajra etc.”

This SAR flagged 65 “suspicious” transactions between September 2012 and August 2013 for $4.44 million involving Amico, General and Jai Gurudev. It raised the question: why “a textiles merchant is receiving payments from a gold refiner?” Questions were emailed to directors of the Rajsi Group but they did not respond.

Rajsi Group isn’t the only one linked to Kaloti in the SARs.

An SAR filed by Standard Chartered Bank, New York on October 17, 2012, noted that Surana Corporation, based in Chennai and now under liquidation, made 31 transactions for $74.72 million from October 2009 through December 2011 with Kaloti.

Last year, Surana was in the list of defaulters released by the RBI for Rs 855-crore bank loan from SBI, Central Bank of India, among others. On January 2 this year, the division bench of National Company Law Tribunal, Chennai, directed the CBI to hand over 400.47 kg of gold seized from Surana to the company’s liquidator. The CBI had seized this gold for alleged violation of import laws in 2013. Later, the agency filed a closure report in the trial court citing “insufficient” evidence and the court accepted it. Surana Corporation is under liquidation and the Resolution Professional for the company did not respond to queries sent by The Indian Express.

Kaloti makes an appearance in another SAR filed by DBTCA on October 16, 2012, which also flags transactions related to Dubai-based Bafleh Jewellery, owned by Ramesh Bhogilal Vora and his son Chirag Ramesh Vora. This SAR identified 3,200 transactions for $7.05 billion during June-September 2012 and said that the bank had “launched a special investigation regarding individuals and entities including Kaloti and Bafleh Jewellery.”

Another SAR filed the very next day, by Standard Chartered Bank, New York (SCB NY), referred to over 5,000 transactions for $2.78 billion from January 2008 to August 2012 made by companies including Kaloti and Bafleh. “The true sources of funds could not be verified leaving the money trail obscure and lacking in transparency,” this SAR said.

Incidentally, Chirag Vora was arrested by Customs on December 21, 2012 at Chhatrapati Shivaji International Airport in Mumbai for allegedly “smuggling” diamond jewellery of Rs 40 lakh. Bafleh Jewellery did not respond to queries sent by The Indian Express. Asked about its transactions, Kaloti, in response to a detailed questionnaire sent by the International Consortium of Investigative Journalists (ICIJ), said that it owed “legal duties of confidentiality” to its customers and so was not in a position to disclose “proprietary information of the type you are seeking.” Claiming it had “remained fully compliant with all legal and regulatory requirements relating to its business and all transactions,” Kaloti said that KYC checks on all clients are regularly reviewed and updated. It added that it had ceased trading with Surana Corporation in 2013.

On transactions with companies of Rajsi Group, Kaloti said: “It is not clear why you seem to expect, or assume, that the recipient (third party) in a third-party transaction would necessarily, or even likely, be in the same business as the remitter of the payment; this is certainly not consistent with a standard understanding of typical third-party payments. Kaloti has remained fully compliant with all legal and regulatory requirements relating to its business and all transactions which it has been party to.”

When asked about the company’s transactions with Kaloti, Met Trade India’s director SC Tandon told The Indian Express: “All payments were against commercial transaction only which are linked to London Bullion Market Association Rates duly supported by documents required for International trade and movement of goods including but not limited to Airway Bills etc. All the consignments were subject to 100% examination by Custom authorities … The material purchased from Kaloti is raw material for one of the segments of our business and used for manufacturing of finished goods. Few of the consignments were also canalized through State Trading Corporation for further use by us on consignment delivery basis.”

Despite the US indictment, the US Treasury Department never took action against Kaloti. Former Treasury officials said a decision on whether to move ahead was deferred for fear of angering the United Arab Emirates, a key US ally in the Middle East. When attempts to convince the UAE to act on its own against Kaloti fizzled, the investigation was mothballed, investigators told ICIJ.

A DEA spokesman said the Kaloti case is now closed and declined to answer questions about the investigation.

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