Many Software
Companies are Vehicles of Money Laundering
Software
companies are mushrooming in India at a rocket speed. India has become
a rich country of Techno-entrepreneurs. Many techies are getting
handsome orders from US & European countries but the darker side
of this silver lining is that many software companies There are some
software companies, which do not really have great desire to attain
excellence by creating new products are also the
vehicles of money laundering.
A
few lines of programming commands may be worth nothing, or everything, depending on
one's point of view. It's quite tricky to assess the worth of the
code. There is no physical movement involved which can be tracked by
the Custom officials. It requires nothing to show the exports of
software.
Consider
a criminal or a politically exposed person who has money stacked away
in an obscure bank in Bahamas or Cayman Islands. Software companies
have become a big boon for these profiles. The money which is
considered to be worth nothing in Bahams and Cayman Islands as it
yield nothing and can not be even spent was introduced in the legal
channels.
Legal
money has a huge spending capacity against the huge restrictions on
the black money.
When
a political leader or criminal or a launderer sets up two companies,
one in India (Completing the EOU, SEZ, STP or EHTP formalities to
avail complete tax exemption) and the other in the US.
Indian
company gets his US company to place an order for software services
with his Indian company. The US company pays for the service, which
may be so silly that it can be done by e-mail, but who is to assess
its real worth? With time, the relationship between the two companies
grows. Orders get bigger.
Launderer
then uses this money to pay himself a hefty salary, buy a Beamer and
generally have a good time.
Banks,
from which a common person cannot withdraw money without being taxed,
tagged and questioned, will vie with each other to give the
deposited money to the Indian software company at concessional rates
of interest.
The
Indian company gets a prestigious award for its export performance. It
declares handsome dividends — which are tax-free in the hands of the
investors.
The
investors are, of course, launderer, his shell companies, his family
members and benami friends and associates. He laughs all the way to
the bank where he now keeps what was once Black money, now
laundered in pristine white!
This
is the magic of technology !
Mayur
S.Joshi*
Author
is promoter of Indiaforensic Research Foundation and also the winner
of the prestigious global ACFE award. Author can be reached at mayur@indiaforensic.com
