Profits from cricket betting constitute proceeds of crime under PMLA: Delhi HC

New Delhi, Nov 25 (PTI) The Delhi High Court has held that profits from cricket betting would constitute "proceeds of crime" under the anti-money laundering law.

The high court said this is because the taint attached to the property at its very inception, originated from a criminal activity relatable to a scheduled offence, persists throughout its subsequent use.

A bench of justices Anil Kshetarpal and Harish Vaidyanathan Shankar said even if cricket betting is not a separate predicate offence, non-availability of the Super Master IDs, which was a culmination of a series of criminal activities related to a scheduled offence, would have made the international cricket betting racket non-functional.

"For instance, if a person acquires any immovable property through acts of forgery, cheating and criminal conspiracy and thereafter utilises such property for a downstream activity, such as conducting an unlicensed real-estate business which is not a scheduled offence, the proceeds generated from the latter activity nonetheless constitute 'proceeds of crime' under the PMLA," the court said in its judgement passed on Monday.

The high court passed the verdict dismissing a batch of petitions filed by several persons in an alleged Rs 2,400 crore international cricket betting racket from 2015, challenging the provisional attachment orders (PAOs) made over a decade ago by the Enforcement Directorate (ED).

In September 2015, ED issued a PAO, attaching moveable and immovable properties valued at approximately Rs 20 crore of the accused, and also issued a show-cause notice in October 2015 for money laundering under the Prevention of Money Laundering Act (PMLA).

The petitioners challenged the PAO orders as well as show cause notice before the high court.

The action was initiated by the ED against the petitioners in connection with large scale hawala transactions and illegal international cricket betting operations conducted through a UK-based website Betfair.com.

According to the ED, the operations were stated to have been carried out from a farmhouse situated in a village in Vadodara.

The PAO was issued after the ED raided the residence of one of the accused, who was acting as a conduit in the international cricket betting network. He allegedly bought master and client login IDs for a betting platform at Rs 2.4 crore each and made payments abroad through unauthorised channels.

The ED found that these IDs were issued without completing the mandatory KYC process. During the raid, the probe agency recovered incriminating documents, valuables and Rs 10 lakh cash.

While refusing to set aside the PAO and subsequent proceedings, the court held that the designated/ authorised officer, making the attachment, "possessed sufficient and cogent material to form the requisite reason to believe" and "was not mechanical or predicated on mere suspicion".

It said the "PAO also indicates the existence of a clear nexus between the material collected and the inference drawn" regarding the involvement of the accused in the process of money laundering. PTI SKV ZMN