India’s battle against counterfeit currency took a decidedly sharp turn when recent intelligence inputs indicated that its neighbour, China, is emerging as a possible source and conduit for fake Indian currency notes (FICN) meant to destabilise the Indian economy.
A report accessed by DNA confirms for the first time that fake currency worth crores is being sent via “staging posts” and “distribution networks (which) have been established in China,” among six other nations. The report was prepared on March 17, 2011, by compiling key inputs from intelligence agencies such as the RAW, IB, DRI as well as investigative organisations like the CBI.
In fact, on Thursday, Indian intelligence notched up one of its biggest successes in combating counterfeit currency by helping Nepal authorities arrest a Pakistani national carrying fake Indian currency totalling Rs55 lakh. “We are examining the source and conduit for these notes, but it could be even from China,” a senior intelligence official told DNA.
While the arrest has further underscored the financial threat from India’s neighbours, the report noted that the common strategy was to print the fakes in Pakistan from where it was then sent to network operators in countries like China and then handed over to “wholesale” agents in India.
“Subsequently these wholesale agents would forward it to individual group networks based in other parts of India,” an official privy to the report told DNA.
“China was always known to be the biggest conduit for drugs in South-East Asia, and the same routes used to smuggle drugs is now being used as the conduit for fake currency,” said Jayadeva Ranade, a former additional secretary in R&AW who has spent decades studying China. “In fact this also makes sense because we always knew that operators in Thailand could produce some of the best quality of fake Indian currency. These could then be facilitated (transported) through China before ending up in Indian markets.”
India is, however, not the only target. The report noted that the same counterfeiters were also keen on fake US dollars which could be used to destabilise the American economy. “There are clear signs of the usage of these well-developed global networks to counterfeit other currencies such as the US dollar.” This, intelligence sources told DNA, could be another reason for China’s growing interest in becoming a conduit for fake currency.
Besides destabilising the Indian economy, fake currency was also used for financing terror attacks in India. Indian intelligence now has evidence to prove that one of the key planners of the 26/11 Mumbai terror-attack, David Coleman Headley, used fake currency to fund his operations here.
“The use of FICN by terrorists, including David Headley, leave no doubt that FICN is an important source of terror financing for elements sponsored by the ISI in India,” the report said. In fact, underworld don, Dawood Ibrahim, and his associates have also been found to aid this massive terror financing with fake currency.
Currently, there are 15 cases of fake Indian notes “being used for terror financing” with the Indian security establishment. Besides China, other major distribution and staging posts for fake Indian currency “have been established in UAE, Bangladesh, Nepal, Thailand, Malaysia and Sri Lanka”.
In fact, Indian intelligence has found evidence of these networks in Europe as well when in July this year two men were arrested in Amsterdam carrying fake Indian currency worth Rs7 lakh. “The most important global FICN networks are supervised and controlled by 28 gangsters based in six countries,” the report said.
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