Indian security agencies are concerned about the Russian mafia's invasion
- The mafia is buying huge tracts of land in Goa, Delhi, Maharashtra through benami companies
- Intelligence feedback is that the Russian mafia is buying land to set up base for running its arms and drugs trade
- Goa, with its poor policing, lax administration is currently the most favoured destination
- There are fears that the Russian pockets of influence could serve as safe havens for international criminals and terrorists.
- Millions of dollars of slush funds are being routed into the country through hawala channels to fund mafia operations.
"The flow of unverifiable investments from tax havens such as
Mauritius, Cyprus, Cayman Islands and also from criminal groups operating from other
countries poses a security threat to our economy. It has been noticed that the Russian
mafia has invested large sums in real estate projects in Goa. It may be mentioned that fdi
into real estate comes under the automatic approval route."
—A 'secret' National Security Council Secretariat (NSCS) report on potential threats to national security from FDI, sent by the PMO to 12 key ministries on September 26, 2006
Trouble is brewing in paradise. The sinister and notorious Russian mafia has trained its sights on Goa, the land of tourist-beckoning beaches and wild rave parties. Hounded in France and the UK, and kept a close watch on in the United States and Israel, the Russian crime syndicates have been looking for new pastures in Asia and the Far East to set up shop, to sprout new tentacles for their drugs, arms and flesh trade. With its poor policing and a lax, pliable and corrupt administration, they couldn't have found a better setting than Goa. Also, in a state where tourism is the prime industry, foreigners are not closely monitored and go unnoticed unlike in other parts of the country.
The Russian mafia's gameplan seems simple: buy up properties in Goa to set up businesses—restaurants and hotels—that double up as bases for its illegal drugs and arms trade. Invest in real estate in Mumbai and Delhi to carry out its money laundering operations. Its presence in the two metros would also provide it a base to channel funds in and out of the country.
In Goa, the Russian "invasion" is no secret. Those opposing the wanton buying of real estate by foreigners are well aware of the Russian crime syndicate's interest in the state. Activists like Devendra Prabhudesai, a school teacher and local resident, points to "illegal activities" that have increased ever since the Russian influx began. He, along with Mathew Fernandes, have started an NGO to oppose the entry of foreign anti-social elements into Goa. Their campaign is focused on Morjim beach which is referred to locally as 'mini-Russia' .
Police officials are in the know of what is happening. One officer told Outlook that the Russian presence in Goa is on the rise. "Nearly 75 per cent of the chartered flights coming to Goa are from Russia and the so-called tour operators have hired young English-speaking Russian girls to live here on tourist visas and work as guides and agents for Russian companies. We have also noticed that many Russian girls are being pressed into prostitution for an elite clientele in and around Morjim," a senior Goa police official told Outlook.
According to intelligence officials, this fits in with the style of operations that the Russian mafia has adopted internationally. It prefers to make its entry through the tourist industry and then move on to the more core areas of their business. Chartered tourism has been used by the syndicates to smuggle in and out drugs and contraband. Till the mid-'90s, the Russian 'tourists' who flooded Indian cities like Delhi were sent to procure consumer goods and durables, medicines and clothes by the mafia. Today, the game has changed and the mafia has gone on to flood tourist destinations with designer drugs and to strike arms deals.
A typical rave party in Goa. Now Russians have edged out many other foreigners in the state.
The Russian syndicate's presence in Delhi and Mumbai is more for reasons of financial fraud. Intelligence agencies suspect that this is part of a global exercise to launder billions of dollars parked in tax havens. "Since investment in real estate comes through the automatic approval, we have failed to set up adequate checks to prevent such deals," says an intelligence agency official. According to him, properties running into crores have been picked up through front companies in both Delhi, Mumbai and parts of Maharashtra. Such real estate can also be sold to make profits and generate legitimate funds.
The NSCS report says there are three specific threats to India's national security. It notes that "the source of money for such deals could be illegal" and "this could be part of the money laundering process". It also raises concerns about such investments being "controlled by anti-Indian elements" which could be "manipulated through sudden withdrawal or pumping in of capital to cause a serious economic crisis". Also, such dubious foreign "investors could indulge in or be tools of economic espionage" in the country.
Foreigners buying real estate has become a controversy in Goa in the last three years. The issue rocked the state assembly last year which witnessed several noisy scenes as the Opposition parties put the government on the mat. Finally, on July 17, 2006, Chief Minister Pratapsinh Rane, in a written reply to Canchorem MLA Ramarao Desai, stated that in the last three years as many as 482 properties had been sold to foreign nationals, including Russians. However, the chief minister failed to answer whether any violations had taken place in these transactions and made the customary assurance "to look into the matter". Says Manohar Parrikar, former BJP chief minister and the leader of the Opposition: "The whole development pattern has become skewed and greed has ensured that security issues are put on the backburner. The government has in fact facilitated the entry of the Russian mafia by freeing up for sale forest and agricultural land, which couldn't have been sold otherwise. This has led to massive pockets of land ending up with suspicious land grabbers all across the state."
So what is the modus operandi adopted in buying land? Outlook tracked down one instance of a controversial land deal involving Russians. The typical formula is to float a company with an Indian partner and then register it in Goa. Once this is done, huge foreign remittances are pumped in for alleged investment in real estate under the automatic approval route. Once the company buys the land, it severs all connections with the Indian partner. Legal hurdles like transfer of land is peppered over by submitting no objection certificates (NOCS) from fictitious landowners. The local authorities who clear the sale usually look the other way.
This is exactly what True Axiz Resorts Pvt Ltd did when it picked up land in Morjim in April 2005. The company was registered in Goa on March 10, 2005. Just six days later, the board members passed a resolution to buy the land. While the company had one Indian director, Pramod Bhalchandra Walke, two Russians—Leonid Beyzer and Valiulin Rashid—held the majority shares in it. While Pramod was not willing to talk, his brother, Vinod Walke, said Rashid held 999 shares in the company while Beyzer held one share. "The company was formed with Indian share capital but received foreign funds soon after. When my brother Pramod sent these details to the Reserve Bank of India, the Russians asked him to resign from the company," Walke told Outlook.
A sale deed of land bought by Russians
While the sale deed, a copy of which is with Outlook, records Walke's residence as the registered office for True Axiz Resorts, it fails to record a proper address for either of the two Russians. They have been merely shown as residents of a locality in Tembo Waddo, Morjim, Pernem taluka, Goa. The deal would have gone unnoticed but for the fact that one occupant of a small piece of the land, Dilip Morje, discovered that fraud NOCS, some in the name of the dead, were used to legitimise the deal. He filed a petition in the deputy collector's court challenging the deal.
This is just one example of land being sold to a company with foreign nationals as its directors which slipped through the state government's screening process. In fact, the chief minister's list of land acquisitions by foreigners, which he submitted to the assembly, does not have this particular sale.
While the state government has been clearly found wanting in its vigil, central intelligence has been tracking similar deals by foreign criminals. What has also kept Indian security agencies on their toes are inputs from the CIA that two Al Qaeda operatives had visited Goa lasts year. According to the US agency, one Yemeni and an Algerian visited several popular nightclubs and beaches in Goa, took photographs and conducted elaborate surveys of beaches frequented by British and Israeli tourists. This was revealed to the CIA during interrogations and information gleaned from a laptop recovered in Iraq.
Citizens protest against unbridled sale of forest land, in Panjim
But in Goa, national security apart, locals are worried at the state government's moves, which will make influx of large foreign capital into real estate even easier. The focus of all protests has been the draft regional plan 2011 which proposes to convert over 80 per cent of agricultural and forest land open to commercial exploitation. After widespread protests, the government was finally forced to scrap the plan on January 18.
But what happens to the land that has already been transferred to foreign criminals? Intelligence officials blame the reluctance of the central and state governments for not initiating a thorough investigation to track the Russian crime syndicates and their real estate holdings. One view is that it may discourage foreign investors. As for the state government, it set up a five-member committee to probe land deals by foreigners last year. The committee is yet to present its findings. A detailed questionnaire from Outlook to the chief secretary of Goa failed to elicit any response.
Agitated citizens of Goa say that the state and central governments need to wake up to the gravity of the situation. After all, the presence of the Russian mafia has been recognised by no less than the NSCS and the PMO. Will it, they wonder, require a shootout or a huge drug haul to get the authorities to act?