Itanagar

The Enforcement Directorate has conducted coordinated searches at nine locations across Arunachal Pradesh in connection with a suspected large-scale interstate liquor smuggling and money laundering network, officials said on Monday.

The action, taken under the Prevention of Money Laundering Act, is part of an expanding probe into an alleged syndicate exploiting tax differentials between states.

Officials said liquor meant for sale within Arunachal Pradesh was allegedly diverted and supplied illegally to markets in Assam and other states.

The searches covered multiple towns including Itanagar, Naharlagun, Seppa, Ziro, Daporijo, Namsai and Roing, targeting wholesale liquor businesses allegedly linked to the network.

The investigation began with multiple FIRs registered by Assam Police regarding illegal transportation of liquor from Arunachal Pradesh into Assam. Inputs from the Assam Excise Department further strengthened the case.

An Enforcement Case Information Report was registered on October 17, 2024, and later expanded through an addendum incorporating 173 more FIRs.

Investigators suspect the network operated through manufacturers, bonded warehouses and wholesalers while concealing ownership through proxy tribal partnerships and dummy licence holders. During the latest searches, officials found several wholesale units allegedly operating under proxy licences issued in the names of local individuals while control remained with the suspected masterminds.

Financial scrutiny reportedly showed that 51 to 90 per cent of credits in some bank accounts consisted of unexplained cash deposits. Authorities also flagged invoice splitting, with transactions kept below Rs 2 lakh to avoid scrutiny. In one case, over 200 invoices of identical value of Rs 1,99,554 were generated within a month at one site.

The ED said around Rs 40 lakh in unaccounted cash was seized during the searches.

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Officials also recovered 14 seals, some purportedly belonging to the Excise Department of the Arunachal Pradesh government, suspected to have been used to create fake transport permits for unauthorised liquor movement. Further investigation is underway.