Dirty business

J Dey explores how the cash flow in the underworld is fast changing

J Dey explores how the cash flow in the underworld is fast changing

Underworld business today is no longer just about crime. It boasts of some of the sharpest business minds of our times. This, say observers, is reflected in the drastic changes in gangland business over the last four years.
Gangs no longer believe in small game. This includes any business that gives returns in just a handful of crores like counterfeiting, extortion, etc.

Since 2005, they have been focusing on businesses that rake in hundreds and thousands of crores, said a source.

Mob bosses, especially Dawood Ibrahim, have started thinking like business heads of international conglomerates.

Illustration/Satish Acharya

One of the first records of the growing scale of the underworld's business came in the form of a transcript of a phone conversation in 2005 between Dawood's brother Iqbal Kaskar and a middleman named Lallu.
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Lallu is heard telling Kaskar that the land on which the historic Crawford Market stands, valued at Rs 300-crore then, would shortly be theirs, as BMC officials had accepted Rs 25 lakh to look elsewhere.

Though this attempt was botched, it was followed by new undertakings that changed the way in which the underworld conducted business.

DVD piracy

On top of the list is the pirated DVD business, which is ruled by D Company.

The copy of a new film is stolen straight from a Mumbai laboratory andu00a0 smuggled to labs in Pakistan, Bangladesh and Malaysia for duplication. They make a profit of around Rs 500 crore per film.

To evade the law, they have now started using the Internet to transfer the pirated movies.

Intn'l flesh trade

Another new business is exporting minors to Gulf countries. Every year after Ramzan around 3,000 girls are sent there for three months.

The gang spends around Rs 4 lakh per girl and makes Rs 15 lakh on each one. It is an estimated Rs 275 crore business per season.

Subtle

And it's not just the businesses. Even the working style of the gangs has changed drastically (see box). They now work like professionals.
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In a conversation recorded by the Crime Branch in 2007, gangster Ashwin Naik is politeness personified as he extorts money from a builder.

They are worth...

He does not raise his voice or get abusive, even when the operator sounds reluctant to pass the phone to the boss. Naik addresses him with a polite 'tumhi'.

Police Commissioner D Sivanandhan said, "Some gangs are very organised.

They have departments some people are entrusted with legal jobs, some do the recruitment, some handle logistics like organising food and strong houses and some are responsible for distribution of money.

Gangsters are even promoted and sent overseas just like in corporate houses."

50% D Company's growth rate before 2005

200% A conservative estimate of D Company's growth rate since then

Other Gangs

Most other dons Ejaz Lakdawala, Ashwin Naik, Hemant Pujari, Ravi Pujari are so embroiled in evading the law that they haven't been able to expand their business.

Even Chhota Rajan, the next biggest don in terms of both monetary worth and clout.

He has lost key men like O P Singh, Balu Dokre and Jaggu Shetty. He doesn't trust his existing team. His wife's arrest in 2005 made it even more difficult for him to make a comeback.

The exception

Arun Gawli's gang is flourishing despite being hounded by the law because their income is regularised.

"It is common knowledge that builders in central Mumbai and Kanjurmarg add 10% to the flat cost to recover the money they have to pay to the gang," said a source. Also, the gang has always worked like a corporate house.

"Gawli's men have defined roles, are paid monthly salaries and families of slain gang members like Ashok Joshi are even given pensions," he added.

Corporatisation

Over the past four years, the underworld has started working like a corporate house. They have departments and even employ specialists...

IT: Chhota Shakeel has a computer specialist, who handles hacking and sending e-mails to gang members. Keeping tabs on IT developments is part of his job profile.

Finance: Dons also have a finance expert, who could be a high-profile builder, businessman or politician.

His job is to advice the don on how to invest money to reap maximum returns. In most cases, the financial advisor has no criminal past, which makes it difficult to track him.

HR: Several gangs have experts involved in recruiting new gangsters. Chhota Rajan's key lieutenant D K Rao is one of the most accomplished recruiters.

Food: There is a department that handles the demand for food. The department hires a room near a prison to cook food and deliver it to the dons and other close associates.

Tele calling: A caller's job is to phone the target with threats after all the details are provided by the logistics department.

Legal: The department deals with issues like arranging bail, hiring lawyers and providing legal aide to undertrials who can be lured into the gang.

How to bust the underworld money trail
A finance expert, who did not wish to be named, said the approach of the police in India is not appropriate.

An average cop is not equipped to track an underworld gang's financial syndicate.

More often than not, a cop investigating a gang's finances is transferred by the time he has managed to grasp the basics.

The cop who replaces him then has to start from scratch.
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The Income Tax department and the Enforcement Directorate should employ financial experts who can follow the money trail and nail the culprits.

This is was what the FBI does. And one of their biggest victories was nabbing gangster Al Capone. They employed people trained in tracking finances to nab him. This is certainly not the work of the regular police.
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Did you know?
Al Capone was never convicted on racketeering charges. He was nailed for tax evasion.
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How Dawood led the way...

Dawood used a two-pronged approach to boost business.

He entered businesses that promised huge turnovers and simultaneously cultivated white-collar associates.

He employed business advisors who led him to the most lucrative of legitimate companies in the cement, ship breaking, construction and bullion industries.

He even has politicians for partners. A political insider said, At least six Mumbai politicians have business partnerships with Dawood.
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This has now reached a point where businessmen choose too involve him. Revealed a source, There have been cases where business magnates have approached him for settlements.
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Dawood operates just like a CEO. Like underlings in an MNC rarely get to meet the top boss, most of Dawood's men haven't even heard his voice.

All reports indicate that Dawood stopped making direct calls in 1996-97.