The story so far: A report submitted by the Finance Minister in the Rajya Sabha states that 5,892 cases were taken up by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA) 2002, since 2015. Of these cases, only 15 convictions have yet been ordered by special courts. The government claims that investigations have been initiated in more or less all cases, and that Enforcement Case Information Reports (ECIRs) have been issued to initiate proceedings. However, these figures raise two important aspects. First, that the number of convictions vis-a-vis total cases is far from satisfactory and secondly, that money laundering cases have been rising signalling that the government has not been able to check such financial crimes.
What is a laundromat?
The term is said to have originated from the use of laundromats by organised crime syndicates in the U.S. as cover for their crimes and under-the-table dealings. A laundromat is an all-purpose financial vehicle. It may be set up by a bank or any other company engaged in providing financial services. However, it can also help clients launder the proceeds of crime, hide ownership of assets, embezzle funds from companies, evade taxes or currency restrictions and move money offshore.
