Noida: A Chinese national and two of his Indian associates were arrested for allegedly operating an international hawala and money laundering network through multiple shell companies. UP Police Special Task Force (STF) said the accused were using a mobile phone cover manufacturing business as a front to route funds between India and China.The three men — Liao Longhui, who allegedly has been living in the country illegally for nearly six years after his visa expired, and his associates Sanjeev Kumar, a Ghaziabad-based chartered accountant, and Kaushalendra Singh of Auraiya — were arrested on July 22 during a search at Purvanchal City. Longhui was based in the Sector 93 highrise.The arrests followed intelligence inputs on foreign nationals operating shell companies out of NCR to facilitate hawala transactions and other financial crimes. After weeks of scanning, cops zeroed in on YTL Manufacturing Pvt Ltd in Sector 83 on learning its assets are controlled by Longhui.A team led by DSP Navendu Kumar subsequently summoned Longhui and his associates to the STF office with the company’s records and travel documents. Cops said Longhui was unable to produce complete visa and company-related documents. He also led police to his apartment, saying he would produce additional records there.During the search, police allegedly recovered incriminating documents linked to several shell companies, including invoices and incorporation documents of multiple companies, besides cheque books for multiple bank accounts, and an Aadhaar card with Longhui’s photograph but bearing the name of Samuel Lotha and an address in Kohima, Nagaland.
Police recovered incriminating documents linked to several shell companies, including invoices and incorporation documents of multiple companies, besides cheque books for multiple bank accounts
The STF seized the documents along with five laptops, nine mobile phones, a tablet, two PAN cards, two Chinese passports, a Chinese identity card, 10 company seals, and cheques worth Rs 4.7 crore.Additional SP Rajkumar Mishra said Longhui came to India in 2018 and took over operations of YTL Manufacturing, which his father-in-law and brother-in-law initially set up. He overstayed after his visa lapsed in 2020.“The company manufactured mobile phone covers and imported raw material from China at inflated prices, while the finished products were allegedly sold in markets such as Karol Bagh and Nehru Place in Delhi through under-invoicing,” Mishra said.Under-invoicing involves declaring a lower invoice value to customs or tax authorities than the goods’ actual selling price, with the balance settled secretly through informal channels, cash, or offshore accounts. Police said Longhui transferred the balance amount through hawala channels to China.Cops alleged that Longhui persuaded his employees and associates to allow him to use their identity documents to float shell companies that were later used for money laundering. Some of the bogus firms identified from the seized documents include JNS Infra Heights, Refan Enterprises India, Tidydesk Essential, Z One Enterprises, Hanuraj Trading Solution, UPMAX India, Mezetech Power India, Excellence Mobile Tech India. Two offshore shell companies were traced to Hong Kong.“We have also found links between YTL Manufacturing and Ravi Kumar Thakkar alias Natwarlal, an aide of Chinese citizen Xue Fei who ran a club for Chinese expats in Greater Noida before being arrested in 2022 for forgery, cheating and violations under the Foreigners Act,” the additional SP said, adding that investigators suspect the two cases may be part of the same wider network facilitating illegal stay and financial crimes.Police said Sandeep Kumar allegedly helped Longhui incorporate several of the shell companies and facilitate banking operations linked to the network, and are now examining the full extent of his financial dealings. Police said they are working to verify the identity of Samuel Lotha, whose name appeared on the card, and to establish whether his identity was used without consent. They are also probing Kaushalendra’s role. Police have so far found two shell companies in his name. They are also investigating two accounts leaked to Singh, which were allegedly being used for hawala transactions.Efforts are also on to trace the financial trail, beneficiaries of the hawala transactions, and other people linked to the network.The three are facing charges under BNS sections 318(4) (cheating), 338 (forgery of valuable securities, wills, and important financial or property documents), 336(3), 340(2) (fraudulent or dishonest use of forged documents or electronic records), and 3(5) (common intention), as well as sections 3, 12(1) and 21 of Immigration and Foreigners Act, 2025.